Wednesday, August 31, 2005
Google Launches IM
Marking perhaps its most ambitious departure to date from its core search business , Google unveiled its own instant messaging platform yesterday, one that includes voice chat options. Some analysts say the service could become a prelude to an even bigger leap in which Google becomes a provider of Voice over Internet Protocol (VoIP) telephone service. Google remained mum, with a spokesman confirming yesterday that Google had a product announcement coming, but declining additional comment.
The search firm's reluctance to talk only led to rampant speculation about what the launch might involve. While most analysts say an instant messaging product was a likely bet, some say it might go further, reaching into areas such as VoIP or even video chat. An IM client fills a significant gap in the offerings that Google has compared to other portals, including bitter search rivals MSN and Yahoo, as well as AOL, which is being re-launched as a standalone portal and already has the most popular instant messaging client.
Since voice chat is integrated into Google's IM tool, another target might be Skype, the person-to-person software firm that can be used for both voice and text chat and has made quite a splash in the VoIP space, particularly in Europe but increasingly in the U.S. In taking aim at IM, Google will have its work cut out for it. America Online counts some 40 million users of its two IM brands in the U.S., with AOL Instant Messenger, or AIM, wildly popular among younger users, and ICQ still favored by many other users for its interoperability. Yahoo runs second with 20 million users of its IM client and Microsoft boasts about 14 million users of is MSN Messenger software, according to comScore Media Metrix.
Any Google IM client would likely rely heavily on open source technologies, according to analysts. According to reports, the system uses the Jabber open source technology, an important fact, because Jabber can work with several leading IM systems, including AOL's ICQ and iChat, Apple's IM client. John Battelle, an independent search analyst and the author of an upcoming book on Google, said the speculation ranged from a basic IM client to some type of free WiFi service or full-blown VoIP. IM, he added, is "a no-brainer." "IM ties folks to a platform, and that's what Google is building," Battelle said. Search Engine Journal editor Loren Baker wrote in her blog that whatever the specific announcement, it appears to be "big news."
Given Google's penchant for public relations ploys -- witness the April Fool's Day launch of Gmail -- Baker noted that today is the anniversary of the date that Thomas Edison filed a patent for the moving picture, which gave some weight to the rumor that the IM client would have a video element, which would have put it ahead of some rival technologies. "Could Google be adding video capabilities to its Google Talk Messenger that would make the software worth downloading and using?" Baker asked. "Google needs to give users a unique or semi-unique offering to get them using the software and to calm their nerves about advertising targeted to messaging or chat conversations, their location, Web behavior and so on. Easy video chat capabilities could be that answer."
Google has been said to be eyeing many new business areas, from rumors that it's developing its own browser to reports that suggest it is interested in becoming a domain registrar or a Web hosting concern. Speculation about what Google might do next was fueled last week when the company registered with the Securities and Exchange Commission for the right to sell some 14 million shares of stock. The resulting $4 billion in cash that Google stands to gain may become fodder for acquisitions, analysts said, though there is little agreement about what type of buy might make the most sense for Google at this time.
Meanwhile, rarely do consecutive days pass without Google announcing a new product or feature. This week has already seen the debut of Google's second pass at the desktop search realm, a tool that features a "sidebar" that displays various online and search information.
Brought to you by the Guardian eCommerce Privacy Seal Program.
The search firm's reluctance to talk only led to rampant speculation about what the launch might involve. While most analysts say an instant messaging product was a likely bet, some say it might go further, reaching into areas such as VoIP or even video chat. An IM client fills a significant gap in the offerings that Google has compared to other portals, including bitter search rivals MSN and Yahoo, as well as AOL, which is being re-launched as a standalone portal and already has the most popular instant messaging client.
Since voice chat is integrated into Google's IM tool, another target might be Skype, the person-to-person software firm that can be used for both voice and text chat and has made quite a splash in the VoIP space, particularly in Europe but increasingly in the U.S. In taking aim at IM, Google will have its work cut out for it. America Online counts some 40 million users of its two IM brands in the U.S., with AOL Instant Messenger, or AIM, wildly popular among younger users, and ICQ still favored by many other users for its interoperability. Yahoo runs second with 20 million users of its IM client and Microsoft boasts about 14 million users of is MSN Messenger software, according to comScore Media Metrix.
Any Google IM client would likely rely heavily on open source technologies, according to analysts. According to reports, the system uses the Jabber open source technology, an important fact, because Jabber can work with several leading IM systems, including AOL's ICQ and iChat, Apple's IM client. John Battelle, an independent search analyst and the author of an upcoming book on Google, said the speculation ranged from a basic IM client to some type of free WiFi service or full-blown VoIP. IM, he added, is "a no-brainer." "IM ties folks to a platform, and that's what Google is building," Battelle said. Search Engine Journal editor Loren Baker wrote in her blog that whatever the specific announcement, it appears to be "big news."
Given Google's penchant for public relations ploys -- witness the April Fool's Day launch of Gmail -- Baker noted that today is the anniversary of the date that Thomas Edison filed a patent for the moving picture, which gave some weight to the rumor that the IM client would have a video element, which would have put it ahead of some rival technologies. "Could Google be adding video capabilities to its Google Talk Messenger that would make the software worth downloading and using?" Baker asked. "Google needs to give users a unique or semi-unique offering to get them using the software and to calm their nerves about advertising targeted to messaging or chat conversations, their location, Web behavior and so on. Easy video chat capabilities could be that answer."
Google has been said to be eyeing many new business areas, from rumors that it's developing its own browser to reports that suggest it is interested in becoming a domain registrar or a Web hosting concern. Speculation about what Google might do next was fueled last week when the company registered with the Securities and Exchange Commission for the right to sell some 14 million shares of stock. The resulting $4 billion in cash that Google stands to gain may become fodder for acquisitions, analysts said, though there is little agreement about what type of buy might make the most sense for Google at this time.
Meanwhile, rarely do consecutive days pass without Google announcing a new product or feature. This week has already seen the debut of Google's second pass at the desktop search realm, a tool that features a "sidebar" that displays various online and search information.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Tuesday, August 30, 2005
Internet Company Founder Sales Flourishing
During the late 1990s and into 2000, every Internet entrepreneur had the same dream: Start an online company and launch an initial public offering on Wall Street a year or two later, becoming fabulously wealthy in the process. Fast-forward five years and though the dream remains, parts have changed, experts told UPI's The Web. Venture-capital spending remains flat, expected to be US$21 billion this year, the same as last year, according to a joint survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association, and IPOs have not yet returned to their past peaks.
So, many online entrepreneurs have found a new way to cash in on their projects. The founders of companies such as eHarmony.com, the online dating service, and others, such as Fastclick.com and OptionsXpress.com, are selling stakes in their firms for cash. Because the sales add capital, not only to the firm's coffers, but also to the pockets of the founders, these transactions are called founder sales in the technology-investment trade. "What we're seeing is founders reaching out for 'partial liquidity,'" said C.J. Fitzgerald, with Summit Partners, a venture-cap firm in Palo Alto, Calif., with about US$9 billion in technology investments. "This is for companies that have been bootstrapped, and have been very successful, but the entrepreneurs are taking some money off the table now."
This is good for the companies, Fitzgerald said. They and their founding employees often invest 100 percent of their savings at startup. By giving up a share of their firm for cash, some of which they retain, they generally can feel more confident and perform better in their jobs -- and take the company to the next level of performance, experts said. It enables tech-firm founders to wait for the IPO market to recover, but still get rich in the interim. "The idea of paying out founders from venture investment is a rapidly growing trend, but only makes sense for companies that used relatively little money to build their business," said Javier Rojas, managing director of Kennet Venture Partners in Menlo Park, Calif. "Most of these deals still leave the founder with a big stake if they are active with the business. Founders that are no longer active often can sell their whole stake in these deals."
OptionsXpress.com in Chicago, which Fitzgerald called the "eTrade of options" -- specialized financial derivatives used to minimize risk by institutional investors -- held a founder sale about a year ago, and the extra money "helps the executives make better decisions for the company," he explained. Earlier this year, after a seemingly long wait, OptionsXpress.com went public with a spectacular IPO on Wall Street and now is reporting about $100 million in annual sales. Another firm that followed a similar strategy is called mAudio, a maker of digital audio products for musicians who create virtual studios at home. Investors took a minority share of the firm and provided cash to the founders, in addition to working funds.
"This was one of the fastest growing companies in the music business," said Fitzgerald.
Eventually, the firm was purchased by Avid, the TV editing software and hardware company.
Another expert in these types of investments is attorney Dirk Michels, a partner in the San Francisco office of Kirkpatrick & Lockhart Nicholson Graham, whose practice focuses on technology companies here and in Europe.
Michels said he did not see this trend at the early stage investment, where so called "angel investors" come in to small startup firms. Rather, it appears to be one for latter-stage technology companies. In many ways, Michels, a native of Germany, sees the founder sales as an "investment buyout." That is not the case, however, Rojas argued. "For these companies, the founder owns much of the equity," he said. "When the company becomes valuable, they can raise capital, for the company, and at the same time, get some liquidity and reduce their risk." It is the new way to get rich for technology entrepreneurs today.
Brought to you by Guardian eCommerce Privacy Seal Program.
So, many online entrepreneurs have found a new way to cash in on their projects. The founders of companies such as eHarmony.com, the online dating service, and others, such as Fastclick.com and OptionsXpress.com, are selling stakes in their firms for cash. Because the sales add capital, not only to the firm's coffers, but also to the pockets of the founders, these transactions are called founder sales in the technology-investment trade. "What we're seeing is founders reaching out for 'partial liquidity,'" said C.J. Fitzgerald, with Summit Partners, a venture-cap firm in Palo Alto, Calif., with about US$9 billion in technology investments. "This is for companies that have been bootstrapped, and have been very successful, but the entrepreneurs are taking some money off the table now."
This is good for the companies, Fitzgerald said. They and their founding employees often invest 100 percent of their savings at startup. By giving up a share of their firm for cash, some of which they retain, they generally can feel more confident and perform better in their jobs -- and take the company to the next level of performance, experts said. It enables tech-firm founders to wait for the IPO market to recover, but still get rich in the interim. "The idea of paying out founders from venture investment is a rapidly growing trend, but only makes sense for companies that used relatively little money to build their business," said Javier Rojas, managing director of Kennet Venture Partners in Menlo Park, Calif. "Most of these deals still leave the founder with a big stake if they are active with the business. Founders that are no longer active often can sell their whole stake in these deals."
OptionsXpress.com in Chicago, which Fitzgerald called the "eTrade of options" -- specialized financial derivatives used to minimize risk by institutional investors -- held a founder sale about a year ago, and the extra money "helps the executives make better decisions for the company," he explained. Earlier this year, after a seemingly long wait, OptionsXpress.com went public with a spectacular IPO on Wall Street and now is reporting about $100 million in annual sales. Another firm that followed a similar strategy is called mAudio, a maker of digital audio products for musicians who create virtual studios at home. Investors took a minority share of the firm and provided cash to the founders, in addition to working funds.
"This was one of the fastest growing companies in the music business," said Fitzgerald.
Eventually, the firm was purchased by Avid, the TV editing software and hardware company.
Another expert in these types of investments is attorney Dirk Michels, a partner in the San Francisco office of Kirkpatrick & Lockhart Nicholson Graham, whose practice focuses on technology companies here and in Europe.
Michels said he did not see this trend at the early stage investment, where so called "angel investors" come in to small startup firms. Rather, it appears to be one for latter-stage technology companies. In many ways, Michels, a native of Germany, sees the founder sales as an "investment buyout." That is not the case, however, Rojas argued. "For these companies, the founder owns much of the equity," he said. "When the company becomes valuable, they can raise capital, for the company, and at the same time, get some liquidity and reduce their risk." It is the new way to get rich for technology entrepreneurs today.
Brought to you by Guardian eCommerce Privacy Seal Program.
Monday, August 29, 2005
How the Affiliate Marketing Industry Is Dealing With Fraud
Approximately 10 years old, the affiliate marketing industry is one of the newest in performance marketing. Legalities, best practices and associations are in their infancy stages. That said, affiliate fraud is rampant. Every morning I tackle the previous night's Filinet affiliate signups to run through our anti-fraud checklist. Out of 50 applications, there may be 5 to 15 of which are actual, legitimate affiliates. The others are added to a very large database of red flag URLs, names, e-mails, IPs and so forth. The ones who continue to try and breach our network with applications, or use another person's contact information, are shared across our partner networks and on the affiliate message boards, minus the wrong contact information.
In the world of e-commerce , Affiliate Fraud is defined as "Bogus or unlawful activity generated by an affiliate in an attempt to make money." While spam generally angers consumers and click fraud is more geared toward the merchant, affiliate fraud causes casualties on both sides of the industry, affecting both affiliates and merchants. Frauds steal from merchants by generating false leads or sales. They also cripple affiliates by stealing their traffic via replacing their affiliate IDs in links, so that when a buyer completes a transaction, the credit for that transaction goes to the thief and not the actual affiliate who worked so hard to acquire that buyer. These traffic stealers are also known as parasites. There are, however, various strategies in place to deal with the issue of cowboy affiliates willing to lie, cheat and steal their way into making easy money.
The best strategy for fighting fraudulent affiliates is one of prevention, monitoring and communication. Preventing frauds from entering and exploiting an affiliate program is the clear first step in avoiding the affiliate fraud spiral, but that does not make for a complete solution. Aside from stringent applicant screening to catch the obvious perpetrators -- such as those creative folks who sign up with a highly recognizable domain name only to use a hotmail e-mail address and a disconnected telephone number -- there are other steps merchants and networks can take.
Once an affiliate is allowed into our network, they are constantly monitored. We receive their e-mail newsletters, we visit their Web sites and our traffic department constantly reviews patterns for any suspicious activity coming from affiliate links. While some may not like the constant review, affiliates who generate legitimate traffic have nothing to be worried about. All of these extra measures allow us to offer legitimate affiliates the tools and resources they need to successfully generate revenue for our merchant partners.
While this is still an internal part of our business model, there are already several efforts within the industry to deal with rampant frauds. Here are some of the ways affiliate managers and career affiliates are tackling the issues of frauds and parasites by applying self-regulation.
ABestWeb Parasiteware Forum: It shouldn't be a surprise to anyone that ABestweb, being the largest affiliate community on the net has a forum dedicated to outing parasiteware -- any technology that steals traffic from legitimate affiliates by replacing their links with new ones. The forum lists over a dozen of the best-known parasitic companies including Claria, eBates, Kazaa among many others. Affiliates and merchants share war stories about being the victims of parasites as well as tips and strategies to remove parasiteware from computers. While we still research every advertiser we allow into our network, this forum makes it easy to keep abreast of known parasites so that we can proudly be parasite-free. After all, the affiliate industry is the tightest knit in all of Internet marketing, since you really get to know your affiliates and other affiliate managers quite personally. Having known parasites in your network is a big faux pas, and sure to cement you a bad reputation.
Another available forum is AffiliateManager.net, which can be used to check on known fraudulent affiliates that try to penetrate other networks and merchants' programs. According to Shawn Collins, the forum's owner and author of Successful Affiliate Marketing for Merchants, "There are dozens of affiliate managers that communicate often about the latest fraud trends and we share information on affiliates that pose threats."
AffiliateFairPlay.com: AffiliateFairPlay.com is committed to establishing fair trade practices within the affiliate marketing industry. The site's owner, Kellie B. Stevens states, "There are no universal standards in place for the industry as a whole for defining what is even fraudulent [or] bad behavior. Each individual network or merchant is currently defining these. While individual entities certainly have the right (and need to have the right) to establish what is allowed within their own business relationships, if you look at most other industries, there is still a core set of guidelines for the entire industry." At this time, affiliate marketing does not have such core guidelines. So Stevens, who consults with merchants and networks, has dedicated herself toward creating such an entity in AffilaiteFairPlay.com, although it is an on-going process.
What Happens Next? With so much legislation and buzz about other Internet marketing issues such as spyware, adware, spam and click fraud making daily news, it is simply a matter of time before an effort towards some solution solidifies into real standards. Information on sharing is still an essential element in stemming the tide of fraud. Then, either a third-party verification system for affiliates, merchants and networks will be created, or some type of software or list that may be subscribed to will arise. Here is one affiliate manager who is waiting with bated breath and ready to assist.
Brought to you by Guardian eCommerce.
In the world of e-commerce , Affiliate Fraud is defined as "Bogus or unlawful activity generated by an affiliate in an attempt to make money." While spam generally angers consumers and click fraud is more geared toward the merchant, affiliate fraud causes casualties on both sides of the industry, affecting both affiliates and merchants. Frauds steal from merchants by generating false leads or sales. They also cripple affiliates by stealing their traffic via replacing their affiliate IDs in links, so that when a buyer completes a transaction, the credit for that transaction goes to the thief and not the actual affiliate who worked so hard to acquire that buyer. These traffic stealers are also known as parasites. There are, however, various strategies in place to deal with the issue of cowboy affiliates willing to lie, cheat and steal their way into making easy money.
The best strategy for fighting fraudulent affiliates is one of prevention, monitoring and communication. Preventing frauds from entering and exploiting an affiliate program is the clear first step in avoiding the affiliate fraud spiral, but that does not make for a complete solution. Aside from stringent applicant screening to catch the obvious perpetrators -- such as those creative folks who sign up with a highly recognizable domain name only to use a hotmail e-mail address and a disconnected telephone number -- there are other steps merchants and networks can take.
Once an affiliate is allowed into our network, they are constantly monitored. We receive their e-mail newsletters, we visit their Web sites and our traffic department constantly reviews patterns for any suspicious activity coming from affiliate links. While some may not like the constant review, affiliates who generate legitimate traffic have nothing to be worried about. All of these extra measures allow us to offer legitimate affiliates the tools and resources they need to successfully generate revenue for our merchant partners.
While this is still an internal part of our business model, there are already several efforts within the industry to deal with rampant frauds. Here are some of the ways affiliate managers and career affiliates are tackling the issues of frauds and parasites by applying self-regulation.
ABestWeb Parasiteware Forum: It shouldn't be a surprise to anyone that ABestweb, being the largest affiliate community on the net has a forum dedicated to outing parasiteware -- any technology that steals traffic from legitimate affiliates by replacing their links with new ones. The forum lists over a dozen of the best-known parasitic companies including Claria, eBates, Kazaa among many others. Affiliates and merchants share war stories about being the victims of parasites as well as tips and strategies to remove parasiteware from computers. While we still research every advertiser we allow into our network, this forum makes it easy to keep abreast of known parasites so that we can proudly be parasite-free. After all, the affiliate industry is the tightest knit in all of Internet marketing, since you really get to know your affiliates and other affiliate managers quite personally. Having known parasites in your network is a big faux pas, and sure to cement you a bad reputation.
Another available forum is AffiliateManager.net, which can be used to check on known fraudulent affiliates that try to penetrate other networks and merchants' programs. According to Shawn Collins, the forum's owner and author of Successful Affiliate Marketing for Merchants, "There are dozens of affiliate managers that communicate often about the latest fraud trends and we share information on affiliates that pose threats."
AffiliateFairPlay.com: AffiliateFairPlay.com is committed to establishing fair trade practices within the affiliate marketing industry. The site's owner, Kellie B. Stevens states, "There are no universal standards in place for the industry as a whole for defining what is even fraudulent [or] bad behavior. Each individual network or merchant is currently defining these. While individual entities certainly have the right (and need to have the right) to establish what is allowed within their own business relationships, if you look at most other industries, there is still a core set of guidelines for the entire industry." At this time, affiliate marketing does not have such core guidelines. So Stevens, who consults with merchants and networks, has dedicated herself toward creating such an entity in AffilaiteFairPlay.com, although it is an on-going process.
What Happens Next? With so much legislation and buzz about other Internet marketing issues such as spyware, adware, spam and click fraud making daily news, it is simply a matter of time before an effort towards some solution solidifies into real standards. Information on sharing is still an essential element in stemming the tide of fraud. Then, either a third-party verification system for affiliates, merchants and networks will be created, or some type of software or list that may be subscribed to will arise. Here is one affiliate manager who is waiting with bated breath and ready to assist.
Brought to you by Guardian eCommerce.
Sunday, August 28, 2005
ICANN Delays Final Decision on xxx Domain
The Internet Corporation for Assigned Names and Numbers (ICANN) will delay a final vote on whether to approve and activate the ".xxx" top-level domain after requests from the U.S. government and others to hold off on a decision, which was to come this week. The domain has already received preliminary approval from ICANN, with mainly technical issues dealing with the operation of the domain and contract details with operator ICM Registry of Florida to be worked out. A final vote will now come no earlier than the group's next meeting on September 15. ICM first proposed the domain nearly five years ago only to have its initial proposal rejected by ICANN.
International Incident
ICANN had recently heard from a subcommittee that the domain was making governments around the world uneasy. ICANN's Government Advisory Committee chairman had suggested that time be taken to let government agencies weigh in on the domain. But the final straw was a letter from U.S. assistant secretary of commerce Michael Gallagher, who told ICANN that the Commerce Department had received nearly 6,000 letters and e-mail messages about the proposed domain, most raising questions about the impact of the new domain on children.
"The volume of correspondence is unprecedented," Gallagher said. Because of the outpouring of public comment, Gallagher said that extra time would be need "for these concerns to be voiced and addressed." Though it made no formal announcement about the delay, ICANN's board did not vote on the registry contract approval yesterday as planned and has now scheduled such a vote for its September meeting. That ICANN would heed to the demands of the U.S. government is no surprise. The Commerce Department created ICANN and only recently shelved a plan that would have given the group more autonomy to oversee the naming system that enables the Internet to operate effectively.
The triple-x domain has become a flashpoint of controversy on numerous fronts. ICM has tried to address concerns about the impact on young people by creating a non-profit board to oversee the registry and working with the International Foundation for Online Responsibility to administer the domain. ICM also laid out a set of rules that those who applied for the domain would have to follow.
Much of the pressure put on the Commerce Department appears to have come from conservative groups and those representing family values issues. The Family Research Council praised the decision to hold off on the approval.
"The '.xxx' domain proposal is an effort to pander to the porn industry and offers nothing but false hope to an American public which wants illegal pornographers prosecuted, not rewarded," said Patrick Trueman, the top lawyer at the Council. "If the '.xxx' domain were established, pornographers would keep their lucrative '.com' commercial sites and expand to even more sites on '.xxx,' thus becoming even more of a menace to society."
Different groups have raised a range of concerns about the domain. For instance, the American Civil Liberties Union has expressed fear that governments would mandate that porn sites move to the ".xxx" domain, creating an online red light district and possibly limiting or restricting speech in the process. Some have also warned that the domain could give rise to a new form of cybersquatting or with companies forced to register domains on the new domain simply to take them out of circulation and prevent it from appearing in the pornography realm. While ".xxx" has created the most outcry, critics of ICANN and its processes for approving new domains have come under fire before. Many say that ICANN does not allow for enough public involvement or feedback, which results in near-sighted decisions. For instance, another recently OK'd top-level domain, ".mobi" for content suitable for access by mobile devices, is seen by some as a path to a second-rate, mobile-only Internet experience.
"The fact that ICANN did an about-face on .xxx in the first placed shows how they make major decisions without significant and broad input from the public," Lauren Weinstein, the founder of People For Internet Responsibility, said. "They are constantly forced to explain how they arrived at their decisions after the fact, instead of opening the process up as it's going on."
Brought to you by Guardian eCommerce.
International Incident
ICANN had recently heard from a subcommittee that the domain was making governments around the world uneasy. ICANN's Government Advisory Committee chairman had suggested that time be taken to let government agencies weigh in on the domain. But the final straw was a letter from U.S. assistant secretary of commerce Michael Gallagher, who told ICANN that the Commerce Department had received nearly 6,000 letters and e-mail messages about the proposed domain, most raising questions about the impact of the new domain on children.
"The volume of correspondence is unprecedented," Gallagher said. Because of the outpouring of public comment, Gallagher said that extra time would be need "for these concerns to be voiced and addressed." Though it made no formal announcement about the delay, ICANN's board did not vote on the registry contract approval yesterday as planned and has now scheduled such a vote for its September meeting. That ICANN would heed to the demands of the U.S. government is no surprise. The Commerce Department created ICANN and only recently shelved a plan that would have given the group more autonomy to oversee the naming system that enables the Internet to operate effectively.
The triple-x domain has become a flashpoint of controversy on numerous fronts. ICM has tried to address concerns about the impact on young people by creating a non-profit board to oversee the registry and working with the International Foundation for Online Responsibility to administer the domain. ICM also laid out a set of rules that those who applied for the domain would have to follow.
Much of the pressure put on the Commerce Department appears to have come from conservative groups and those representing family values issues. The Family Research Council praised the decision to hold off on the approval.
"The '.xxx' domain proposal is an effort to pander to the porn industry and offers nothing but false hope to an American public which wants illegal pornographers prosecuted, not rewarded," said Patrick Trueman, the top lawyer at the Council. "If the '.xxx' domain were established, pornographers would keep their lucrative '.com' commercial sites and expand to even more sites on '.xxx,' thus becoming even more of a menace to society."
Different groups have raised a range of concerns about the domain. For instance, the American Civil Liberties Union has expressed fear that governments would mandate that porn sites move to the ".xxx" domain, creating an online red light district and possibly limiting or restricting speech in the process. Some have also warned that the domain could give rise to a new form of cybersquatting or with companies forced to register domains on the new domain simply to take them out of circulation and prevent it from appearing in the pornography realm. While ".xxx" has created the most outcry, critics of ICANN and its processes for approving new domains have come under fire before. Many say that ICANN does not allow for enough public involvement or feedback, which results in near-sighted decisions. For instance, another recently OK'd top-level domain, ".mobi" for content suitable for access by mobile devices, is seen by some as a path to a second-rate, mobile-only Internet experience.
"The fact that ICANN did an about-face on .xxx in the first placed shows how they make major decisions without significant and broad input from the public," Lauren Weinstein, the founder of People For Internet Responsibility, said. "They are constantly forced to explain how they arrived at their decisions after the fact, instead of opening the process up as it's going on."
Brought to you by Guardian eCommerce.
Friday, August 26, 2005
Google Poised for $4 Billion Stock Sale
Google surprised analysts today by announcing that it has filed a registration statement with the Securities and Exchange Commission for a proposed public offering of more than 14 million class A common shares of stock. The Internet IPO darling has seen its shares triple since going public a year ago. Google shares closed yesterday at US$285.10 on the Nasdaq Stock Market and were holding steady at $279 per share at noon Eastern time today. If the stock maintains its price, the sale could yield an estimated $4 billion, but analysts expect the prices to drop to as low as $275 in the coming days as stockholders prepare for the dilution. The Stanford Group Company's Clayton Moran said he was not expecting Google to make such a drastic move. "The company has $3 billion of cash today with no debt and will generate another $1.5 billion from its operations this year, so there's no clear need for cash," Moran said. "It's a little bit perplexing as to why Google is going to market now and selling stock."
Moran said the sale is an indication that management is comfortable with the stock price where it is and is willing to dilute out existing shareholders in order to stockpile cash. He expects the news to depress stock prices 2 percent to 3 percent from its pre-announcement price. Google executives have said the company has no current plans to make any acquisitions. According to the SEC document filed today, the company plans to invest the proceeds in highly liquid, investment-grade securities.
After Google sells the 14 million shares, the search engine company will still have about 19.1 million class A shares in its coffers. Combined with 101.7 million class B shares, 70 percent of which are held by co-founders Larry Page and Sergey Brin and Chairman and Chief Executive Eric Schmidt, Google's shareholders will possess about 292.8 million shares. The managing underwriters of the proposed offering are Morgan Stanley & Co. and Credit Suisse First Boston, acting as joint book-running managers, and Allen & Company, acting as co-manager. The underwriters have an option to purchase up to 600,000 additional shares of Class A common stock from Google solely to cover over-allotments, if any.
Analysts said Google's decision to purge itself of 14 million shares is indicative of the intensifying competition in the search engine market. Google, said analysts, is preparing for the next level of competition. "Clearly, Yahoo and MSN and committing a lot of resources to search," Moran said. "Google is compelled to some extent to invest more heavily in its business and possibly do some acquisitions for future growth." Some analysts predict Google will snap up Voice over Internet Protocol provider Skype. Others are speculating Google will buy out Baidu.com, China's largest search engine.
Google already owns a stake in Baidu and in July announced it will open a development center in China. The proposed stock sale would give Google enough to make a large acquisition like Baidu or several smaller purchases. "Google has been acquiring small companies for technology and engineering capability and we would expect that they will continue to do that," Moran said.
Brought to you by Guardian eCommerce.
Moran said the sale is an indication that management is comfortable with the stock price where it is and is willing to dilute out existing shareholders in order to stockpile cash. He expects the news to depress stock prices 2 percent to 3 percent from its pre-announcement price. Google executives have said the company has no current plans to make any acquisitions. According to the SEC document filed today, the company plans to invest the proceeds in highly liquid, investment-grade securities.
After Google sells the 14 million shares, the search engine company will still have about 19.1 million class A shares in its coffers. Combined with 101.7 million class B shares, 70 percent of which are held by co-founders Larry Page and Sergey Brin and Chairman and Chief Executive Eric Schmidt, Google's shareholders will possess about 292.8 million shares. The managing underwriters of the proposed offering are Morgan Stanley & Co. and Credit Suisse First Boston, acting as joint book-running managers, and Allen & Company, acting as co-manager. The underwriters have an option to purchase up to 600,000 additional shares of Class A common stock from Google solely to cover over-allotments, if any.
Analysts said Google's decision to purge itself of 14 million shares is indicative of the intensifying competition in the search engine market. Google, said analysts, is preparing for the next level of competition. "Clearly, Yahoo and MSN and committing a lot of resources to search," Moran said. "Google is compelled to some extent to invest more heavily in its business and possibly do some acquisitions for future growth." Some analysts predict Google will snap up Voice over Internet Protocol provider Skype. Others are speculating Google will buy out Baidu.com, China's largest search engine.
Google already owns a stake in Baidu and in July announced it will open a development center in China. The proposed stock sale would give Google enough to make a large acquisition like Baidu or several smaller purchases. "Google has been acquiring small companies for technology and engineering capability and we would expect that they will continue to do that," Moran said.
Brought to you by Guardian eCommerce.
Wednesday, August 24, 2005
Web Tobacco Buyers Beware: It's Taxable
Anthony Purificato was taken aback in June when the Minnesota Department of Revenue wrote to inform him that it knew he had purchased cigarettes from esmoke.com and that he'd better calculate the state taxes he owed and pay them. Purificato mistakenly thought that Internet sales were tax-free. A resident of St. Paul's East Side who bought smokes online every other month or so over the past few years -- and who actually quit smoking a year ago -- Purificato said he can't figure out how and why the state found out about his purchases, and isn't sure now that he can accurately determine how much he owes.
"I think it stinks," Purificato said. "The state of Minnesota never told [the seller] to stop delivering and they let it [the tax liability] build up. People who are now going on the Internet to buy tobacco should be prepared for what's going to happen." Indeed, Minnesota smokers getting their butts over the information highway now face a new hazard. The state of Minnesota is gearing up to choke off online tax avoidance, which is expected to increase with an additional 75-cent-per-pack state charge that went into effect Aug. 1. And the state has new legal tools at its disposal.
"Our activity has picked up," said George Hoyum, director of the Minnesota Revenue Department's Special Taxes Division. "Tax avoidance is why [Internet sellers] are in business. This not only deprives the state of revenue but it hurts our legitimate Minnesota businesses who are complying with the law."
In the past few months, the state sent letters to 1,100 buyers of Internet cigarettes, having obtained the names from the sellers or other sources. So far the state has collected about US$46,000 in back taxes, Hoyum said. Moreover, the department intends to work with the U.S. Postal Service and commercial transportation companies to monitor cigarette deliveries to residential addresses. Efforts by the Star Tribune to contact representatives of esmokes and other Internet cigarette Web sites were unsuccessful. State officials say the industry apparently has no national association or spokesperson.
The state can't force out-of-state sellers to collect and forward taxes. Its best enforcement tool is a 1949 federal law called the Jenkins Act. The act requires sellers of cigarettes to inform state governments of the names, addresses and purchases of customers, so that states can collect their taxes. The law has been widely ignored by Internet sellers and seldom enforced by state or national governments over the past few decades, a 2002 report by the General Accounting Office (GAO) report found. Most cigarette Web sites don't even hint that state taxes must be paid.
Violation of the law is only a misdemeanor and government prosecutors have focused mostly on bigger crimes.
Sherry Duval, a spokeswoman in St. Paul for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, said Justice Department officials are more concerned about large-scale international smuggling operations or shipments of 60,000 cigarettes or more (300 cartons) between state lines. But as more and more states jack up tobacco taxes to shore up revenues and to discourage smoking, more are looking for their own ways to stop scofflaws. The GAO report predicted that by 2005, Internet cigarettes sales would climb to $5 billion nationally and that states would be losing about $1.4 billion in revenue. Tom Briant, executive director of the Minnesota Wholesale Marketers Association, estimated before a legislative committee this year that Minnesota was losing between $10 million and $25 million a year.
The 2005 Minnesota Legislature responded by tacking on its own version of a Jenkins Act, requiring that all out-of-state parties selling cigarettes provide all the information on buyers that is required in federal law, and also that they register with the department. State and federal officials acknowledge that some sellers, perhaps many, will continue to defy the law. The GAO reported a dismal response to its effort to investigate or interview representatives of Internet cigarette sellers. However, some states are having moderate success. Washington recently sued a New York Indian band that was selling large quantities of untaxed cigarettes, and the band agreed to disclose its customers in Washington.
High-tax California and New York have been leaders in enforcement. The esmokes Web site now has a notice at the top of its main page advising that it won't even deliver to California addresses.
State officials acknowledge that the scale of disclosure will vary widely. Hoyum said about six major Internet distributors are cooperating with the state currently. Briant, who also is executive director of the National Association for Tobacco Outlets, said a more effective curb might be state laws, including one in Minnesota, that require the U.S. Postal Service and private package delivery services to verify, with photo IDs, that recipients of tobacco products are adults. In some states, United Parcel Service and other carriers have quit delivering tobacco products to recipients other than licensed dealers or wholesalers, Briant said.
Brought to you by the Guardian eCommerce Privacy Seal Program.
"I think it stinks," Purificato said. "The state of Minnesota never told [the seller] to stop delivering and they let it [the tax liability] build up. People who are now going on the Internet to buy tobacco should be prepared for what's going to happen." Indeed, Minnesota smokers getting their butts over the information highway now face a new hazard. The state of Minnesota is gearing up to choke off online tax avoidance, which is expected to increase with an additional 75-cent-per-pack state charge that went into effect Aug. 1. And the state has new legal tools at its disposal.
"Our activity has picked up," said George Hoyum, director of the Minnesota Revenue Department's Special Taxes Division. "Tax avoidance is why [Internet sellers] are in business. This not only deprives the state of revenue but it hurts our legitimate Minnesota businesses who are complying with the law."
In the past few months, the state sent letters to 1,100 buyers of Internet cigarettes, having obtained the names from the sellers or other sources. So far the state has collected about US$46,000 in back taxes, Hoyum said. Moreover, the department intends to work with the U.S. Postal Service and commercial transportation companies to monitor cigarette deliveries to residential addresses. Efforts by the Star Tribune to contact representatives of esmokes and other Internet cigarette Web sites were unsuccessful. State officials say the industry apparently has no national association or spokesperson.
The state can't force out-of-state sellers to collect and forward taxes. Its best enforcement tool is a 1949 federal law called the Jenkins Act. The act requires sellers of cigarettes to inform state governments of the names, addresses and purchases of customers, so that states can collect their taxes. The law has been widely ignored by Internet sellers and seldom enforced by state or national governments over the past few decades, a 2002 report by the General Accounting Office (GAO) report found. Most cigarette Web sites don't even hint that state taxes must be paid.
Violation of the law is only a misdemeanor and government prosecutors have focused mostly on bigger crimes.
Sherry Duval, a spokeswoman in St. Paul for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, said Justice Department officials are more concerned about large-scale international smuggling operations or shipments of 60,000 cigarettes or more (300 cartons) between state lines. But as more and more states jack up tobacco taxes to shore up revenues and to discourage smoking, more are looking for their own ways to stop scofflaws. The GAO report predicted that by 2005, Internet cigarettes sales would climb to $5 billion nationally and that states would be losing about $1.4 billion in revenue. Tom Briant, executive director of the Minnesota Wholesale Marketers Association, estimated before a legislative committee this year that Minnesota was losing between $10 million and $25 million a year.
The 2005 Minnesota Legislature responded by tacking on its own version of a Jenkins Act, requiring that all out-of-state parties selling cigarettes provide all the information on buyers that is required in federal law, and also that they register with the department. State and federal officials acknowledge that some sellers, perhaps many, will continue to defy the law. The GAO reported a dismal response to its effort to investigate or interview representatives of Internet cigarette sellers. However, some states are having moderate success. Washington recently sued a New York Indian band that was selling large quantities of untaxed cigarettes, and the band agreed to disclose its customers in Washington.
High-tax California and New York have been leaders in enforcement. The esmokes Web site now has a notice at the top of its main page advising that it won't even deliver to California addresses.
State officials acknowledge that the scale of disclosure will vary widely. Hoyum said about six major Internet distributors are cooperating with the state currently. Briant, who also is executive director of the National Association for Tobacco Outlets, said a more effective curb might be state laws, including one in Minnesota, that require the U.S. Postal Service and private package delivery services to verify, with photo IDs, that recipients of tobacco products are adults. In some states, United Parcel Service and other carriers have quit delivering tobacco products to recipients other than licensed dealers or wholesalers, Briant said.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Monday, August 22, 2005
Google Updates Desktop Search Program
Google updated its software for searching PC hard drives and the Internet , giving the free program a new look and adding tools that deliver personalized information based on a user's Web surfing habits. Google Desktop 2, available today as a public beta test, is the company's latest volley against Microsoft and Yahoo as all three race to expand their presence on PC desktops.
The latest Google offering includes several twists. Beyond providing search results, it monitors the user's behavior and presents relevant information in a resizable and moveable vertical window called the Sidebar. One module aggregates e-mail messages from a variety of accounts, including Google's Gmail service or the user's Internet provider. Others display stock prices, personalized news headlines, weather reports and what's popular on the Web. Another module pulls Really Simple Syndication feeds from Web sites that have been visited and offer that service. Unlike other feed aggregators, the user need not take any action for a feed to be added. "For the novice, it's very easy. They don't even have to know what RSS feeds are," said Nikhil Bhatla, Google Desktop's product manager. "They'll just start seeing them in the Sidebar. Advanced users can go in and customize to their hearts' delight."
A photo module displays pictures from the local PC. It also pulls pictures from Web-based galleries that have been visited. Some features, including personalized news, involve sending details of its users surfing habits back to Google. Bhatla said no personally identifying data is transmitted, and users can opt out. The program has several tools for finding information buried on local and network drives as well as the Internet. The Sidebar has its own search box and it adds a new toolbar to Microsoft's Outlook e-mail program for quick access to mail messages. After the initial indexing of all content on a drive -- a process that takes place when the PC is not being used, subsequent indexing takes place in real time. That means a file can be found as soon as it's been saved to the disk.
The Sidebar's search box also finds applications, which can be launched directly from the results list that appears as words are typed in. It's similar to the Spotlight feature of Apple Computer's Mac OS X and the built-in search of Microsoft Windows Vista, which is expected to be released next year. Google, which has come under fire for making private information a bit too easy to find, said it has now disabled the caching of secure Web sites -- an option that can be enabled if the user desires.
It also recommends against using the desktop program tool on computers in Internet cafes or in cases where many people share the same operating system account. Google Desktop 2 also offers the ability to encrypt -- or scramble -- the index to protect it from being read by unauthorized parties. The software works on computers running Windows 2000 or Windows XP . Mac OS X is not supported.
Brought to you by Guardian eCommerce.
The latest Google offering includes several twists. Beyond providing search results, it monitors the user's behavior and presents relevant information in a resizable and moveable vertical window called the Sidebar. One module aggregates e-mail messages from a variety of accounts, including Google's Gmail service or the user's Internet provider. Others display stock prices, personalized news headlines, weather reports and what's popular on the Web. Another module pulls Really Simple Syndication feeds from Web sites that have been visited and offer that service. Unlike other feed aggregators, the user need not take any action for a feed to be added. "For the novice, it's very easy. They don't even have to know what RSS feeds are," said Nikhil Bhatla, Google Desktop's product manager. "They'll just start seeing them in the Sidebar. Advanced users can go in and customize to their hearts' delight."
A photo module displays pictures from the local PC. It also pulls pictures from Web-based galleries that have been visited. Some features, including personalized news, involve sending details of its users surfing habits back to Google. Bhatla said no personally identifying data is transmitted, and users can opt out. The program has several tools for finding information buried on local and network drives as well as the Internet. The Sidebar has its own search box and it adds a new toolbar to Microsoft's Outlook e-mail program for quick access to mail messages. After the initial indexing of all content on a drive -- a process that takes place when the PC is not being used, subsequent indexing takes place in real time. That means a file can be found as soon as it's been saved to the disk.
The Sidebar's search box also finds applications, which can be launched directly from the results list that appears as words are typed in. It's similar to the Spotlight feature of Apple Computer's Mac OS X and the built-in search of Microsoft Windows Vista, which is expected to be released next year. Google, which has come under fire for making private information a bit too easy to find, said it has now disabled the caching of secure Web sites -- an option that can be enabled if the user desires.
It also recommends against using the desktop program tool on computers in Internet cafes or in cases where many people share the same operating system account. Google Desktop 2 also offers the ability to encrypt -- or scramble -- the index to protect it from being read by unauthorized parties. The software works on computers running Windows 2000 or Windows XP . Mac OS X is not supported.
Brought to you by Guardian eCommerce.
Sunday, August 21, 2005
Search Engines Trailing the Top Three Find Big Gains
U.S. search traffic rose by 5 percent overall between the first two quarters of 2005, while AOL and Ask Jeeves enjoyed double-digit growth in traffic. This was at the expense of the big three search engines, which are struggling to grow traffic by more than single figures, according to the MegaView Search report from Nielsen/Net Ratings. Google and Yahoo grew traffic by 6 percent and 9 percent respectively, while MSN actually suffered a 4 percent drop in traffic. However, the fourth and fifth search engines, AOL and Ask Jeeves, grew their traffic by 15 percent and 16 percent.
While AOL's resurgent growth drew comment from Nielsen, it still has only 5 percent of all searches, compared to the 12 percent of its nearest rival, MSN. Nielsen still ranks Google as first for search, accounting for 47 percent of all online searches, followed by Yahoo at 22 percent of total searches. Ask Jeeves' growth was led mainly by a 42 percent increase in news searches. However, its My Way Search made it into the top five rankings with a 2 percent share of all searches. My Way refuses banners and pop-ups, and its stance is proving popular. "My Way's unique anti-advertising value proposition resonates with a small but growing niche market," said Ken Cassar, Nielsen's director of strategic analysis.
Brought to you by Guardian eCommerce.
While AOL's resurgent growth drew comment from Nielsen, it still has only 5 percent of all searches, compared to the 12 percent of its nearest rival, MSN. Nielsen still ranks Google as first for search, accounting for 47 percent of all online searches, followed by Yahoo at 22 percent of total searches. Ask Jeeves' growth was led mainly by a 42 percent increase in news searches. However, its My Way Search made it into the top five rankings with a 2 percent share of all searches. My Way refuses banners and pop-ups, and its stance is proving popular. "My Way's unique anti-advertising value proposition resonates with a small but growing niche market," said Ken Cassar, Nielsen's director of strategic analysis.
Brought to you by Guardian eCommerce.
Saturday, August 20, 2005
Online Sales Beat Expectations in Q2
Online sales approached US$39 billion in the quarter ending in June, according to a report from Boston-based Forrester Research. That's a 25 percent increase over a comparable period last year and a slight increase over the quarter ending in April when sales were US$38 billion.
Forrester analyst Carrie A. Johnson, who wrote the two-page report with colleague Sean Meyer, asserted that the strength of the second quarter numbers are a bit of a surprise, especially compared to last year when seasonal factors forced a decline in sales from the first to second quarters.
"After a somewhat slow start to the year, in which seasonality tempered online sales, the rising tide of offline sales lifted online boats this quarter to exceed expectations," Johnson said in a copy of the report. "Q1 represented the first real quarter in which online retail felt the impact of the same seasonality trends as its more mature offline counterparts," she noted. "This trend continued in Q2, when strong offline consumer spending -- despite rising gas prices and interest rates -- had a ripple effect on online sales."
She added that offline back-to-school sales will be hurt by softening computer and electronic sales during the quarter ending in September. "The trend will be mirrored online," she wrote, "although it's likely to be a bit less pronounced in the channel, where electronics and computer hardware still draw large crowds due to comparison-shopping capabilities and a good match with the profile of online shoppers."
Nevertheless, she maintained that sales for the year are on track to rise 22 percent. Earlier this year, Forrester and Shop.org, the online arm of the National Retail Federation (NRF) in Washington, D.C., released survey findings predicting Web sales would climb 22 percent this year to $172.4 billion. Ellen Davis , director of Media Relations for the NRF, said that "if anything, we can be accused as being a little too conservative" when it comes to predicting online sales.
"Online sales are continuing to grow beyond most people's expectations," she said. Sales categories driving growth this year, she said, include home furnishings, home improvement, grocery stores, clothing stores and department and discount stores. "Most retailers have had a pretty good year so far," she remarked, "which is surprising, given that last year at this time sales were very strong and retailers have tough comparisons to live up to."
"Of course there are some retailers that are struggling but overall the industry is growing quickly," she said. She noted that among the retailers struggling with their online operations are those new to the channel. "Many traditional retailers have found it important to get into the online channel but there are always some growing pains associated with getting into a new channel," she said. "They should be able to overcome those growing pains as they become more established in the channel."
She added that women continue to warm up to online shopping, and they will be online driving sales this year in such things as fragrances, over the counter medicine, jewelry, personal care, flowers and cards. Next week, the U.S. Commerce Department is expected to release its second quarter e-commerce sales numbers. In its report on the first quarter, the department pegged sales at $19.8 billion, a 6 percent increase over its sales figures for the previous quarter. Davis explained that the Forrester numbers don't jibe with those from the Department of Commerce because Forrester includes in its tally sales from tickets, travel, events and auctions, which are excluded from the federal agency's figures.
Without those additional sales categories, she noted, online sales for this year will be around $109.6 billion, compared to $89 billion in 2004.
Brought to you by Guardian eCommerce.
Forrester analyst Carrie A. Johnson, who wrote the two-page report with colleague Sean Meyer, asserted that the strength of the second quarter numbers are a bit of a surprise, especially compared to last year when seasonal factors forced a decline in sales from the first to second quarters.
"After a somewhat slow start to the year, in which seasonality tempered online sales, the rising tide of offline sales lifted online boats this quarter to exceed expectations," Johnson said in a copy of the report. "Q1 represented the first real quarter in which online retail felt the impact of the same seasonality trends as its more mature offline counterparts," she noted. "This trend continued in Q2, when strong offline consumer spending -- despite rising gas prices and interest rates -- had a ripple effect on online sales."
She added that offline back-to-school sales will be hurt by softening computer and electronic sales during the quarter ending in September. "The trend will be mirrored online," she wrote, "although it's likely to be a bit less pronounced in the channel, where electronics and computer hardware still draw large crowds due to comparison-shopping capabilities and a good match with the profile of online shoppers."
Nevertheless, she maintained that sales for the year are on track to rise 22 percent. Earlier this year, Forrester and Shop.org, the online arm of the National Retail Federation (NRF) in Washington, D.C., released survey findings predicting Web sales would climb 22 percent this year to $172.4 billion. Ellen Davis , director of Media Relations for the NRF, said that "if anything, we can be accused as being a little too conservative" when it comes to predicting online sales.
"Online sales are continuing to grow beyond most people's expectations," she said. Sales categories driving growth this year, she said, include home furnishings, home improvement, grocery stores, clothing stores and department and discount stores. "Most retailers have had a pretty good year so far," she remarked, "which is surprising, given that last year at this time sales were very strong and retailers have tough comparisons to live up to."
"Of course there are some retailers that are struggling but overall the industry is growing quickly," she said. She noted that among the retailers struggling with their online operations are those new to the channel. "Many traditional retailers have found it important to get into the online channel but there are always some growing pains associated with getting into a new channel," she said. "They should be able to overcome those growing pains as they become more established in the channel."
She added that women continue to warm up to online shopping, and they will be online driving sales this year in such things as fragrances, over the counter medicine, jewelry, personal care, flowers and cards. Next week, the U.S. Commerce Department is expected to release its second quarter e-commerce sales numbers. In its report on the first quarter, the department pegged sales at $19.8 billion, a 6 percent increase over its sales figures for the previous quarter. Davis explained that the Forrester numbers don't jibe with those from the Department of Commerce because Forrester includes in its tally sales from tickets, travel, events and auctions, which are excluded from the federal agency's figures.
Without those additional sales categories, she noted, online sales for this year will be around $109.6 billion, compared to $89 billion in 2004.
Brought to you by Guardian eCommerce.
Friday, August 19, 2005
Google Brings RSS to News Search
Following the footsteps of rivals and possibly laying the groundwork for new marketing channels, Google has added RSS and Atom content feeds to its news search product -- which has been in beta form for the better part of two years. Google added RSS (Really Simple Syndication) and Atom feed links to the left side of the pages that appear when a user conducts a Google News search. These feeds require an RSS reader plug-in to be read, but are freely available on all subject areas of the news section. For instance, clicking on the business section produces a list of top stories as well as syndicated content feeds. Users can also choose what content to have fed directly to them.
Google said it added the feature after multiple requests from users, saying that such a feature was the most requested upgrade to the news search pages. It joins a host of specialized news Aggregation sites and other large search and portal companies in offering such services to users. "For some time now, the Google News team has noticed a steady uptick in feature requests for feed support," Google software engineer Vijay Boyapati wrote in the official Google blog.
Analysts note that RSS is seen by many growing into a major force for distributing not only content but also advertising on the Web. While RSS is heavily used to distribute printed content such as news stories and blogs, some firms have begun to offer similar feeds for audio and video content, possibly opening still more avenues for marketers to reach Web users.
Forrester Research analyst Charlene Li noted that RSS is getting heavy attention from investors funding startups and from established companies alike, despite the fact that survey results show as few as 2 percent of all Web users employ RSS. One big reason, Li said, is that some 57 percent of marketers active online have expressed interest in using RSS to get their message out.
"With almost every other major player doing this, it was about time that Google followed suit," Li said. One key reason why marketers might want in on syndication feeds is that those who do use them are voracious consumers of content, or as she put it, news junkies. That means they view content from sources multiple times each week, making them better targets for reinforcing marketing messages. However, Li and others believe the intersection of RSS and marketing is still being figured out by content owners, portals and search sites, and others. Google has its own designs, having applied for a patent on a method of delivering ads along with syndicated content -- although the early release of the RSS feeds on Google News are ad-free for now. Word of that patent move, which was made public just recently despite the fact the patent application was filed in late 2003, reverberated around the Web content industry, with many doubting that such a patent could be granted given how many other players are actively looking to blend ads with content through RSS.
One reason cited for Google making the move to embrace RSS was to cut out a middle man, with Google content often being grabbed and consolidated by various news reader programs. Indeed, the terms of service for using the Google News RSS dictate that Google be given credit as the source for news feeds and that the exact source of news content be cited as well. A publisher must also include a link to the Google News block of stories in which the syndicated content is included.
Individual users can also choose to have RSS feeds sent through their customized Google home pages, a recently added feature to the Google menu of services, one that was seen indicating Google becoming more like a Web portal than ever before. Earlier, Google gave users the ability to customize the look and content mix on the Google News search page. "Do not be surprised to see Google AdSense contextual ads integrated into Google News RSS feeds once the syndication takes off," Search Engine Journal Editor Loren Baker wrote in her blog. "Google AdSense has been working quite hard on moving into the RSS advertising field and the Google News feeds will be the ideal location to showcase their relevant advertising."
Brought to you by Guardian eCommerce.
Google said it added the feature after multiple requests from users, saying that such a feature was the most requested upgrade to the news search pages. It joins a host of specialized news Aggregation sites and other large search and portal companies in offering such services to users. "For some time now, the Google News team has noticed a steady uptick in feature requests for feed support," Google software engineer Vijay Boyapati wrote in the official Google blog.
Analysts note that RSS is seen by many growing into a major force for distributing not only content but also advertising on the Web. While RSS is heavily used to distribute printed content such as news stories and blogs, some firms have begun to offer similar feeds for audio and video content, possibly opening still more avenues for marketers to reach Web users.
Forrester Research analyst Charlene Li noted that RSS is getting heavy attention from investors funding startups and from established companies alike, despite the fact that survey results show as few as 2 percent of all Web users employ RSS. One big reason, Li said, is that some 57 percent of marketers active online have expressed interest in using RSS to get their message out.
"With almost every other major player doing this, it was about time that Google followed suit," Li said. One key reason why marketers might want in on syndication feeds is that those who do use them are voracious consumers of content, or as she put it, news junkies. That means they view content from sources multiple times each week, making them better targets for reinforcing marketing messages. However, Li and others believe the intersection of RSS and marketing is still being figured out by content owners, portals and search sites, and others. Google has its own designs, having applied for a patent on a method of delivering ads along with syndicated content -- although the early release of the RSS feeds on Google News are ad-free for now. Word of that patent move, which was made public just recently despite the fact the patent application was filed in late 2003, reverberated around the Web content industry, with many doubting that such a patent could be granted given how many other players are actively looking to blend ads with content through RSS.
One reason cited for Google making the move to embrace RSS was to cut out a middle man, with Google content often being grabbed and consolidated by various news reader programs. Indeed, the terms of service for using the Google News RSS dictate that Google be given credit as the source for news feeds and that the exact source of news content be cited as well. A publisher must also include a link to the Google News block of stories in which the syndicated content is included.
Individual users can also choose to have RSS feeds sent through their customized Google home pages, a recently added feature to the Google menu of services, one that was seen indicating Google becoming more like a Web portal than ever before. Earlier, Google gave users the ability to customize the look and content mix on the Google News search page. "Do not be surprised to see Google AdSense contextual ads integrated into Google News RSS feeds once the syndication takes off," Search Engine Journal Editor Loren Baker wrote in her blog. "Google AdSense has been working quite hard on moving into the RSS advertising field and the Google News feeds will be the ideal location to showcase their relevant advertising."
Brought to you by Guardian eCommerce.
Thursday, August 18, 2005
Yahoo Expands Its Search Engine Index
In a major expansion, Yahoo said yesterday that its online search engine index now spans more than 20 billion Web documents and images, nearly double the material scanned by rival Google.
Yahoo's expansion doesn't necessarily mean it produces more useful results than Google, which has long been considered the Internet's most comprehensive database. But the breakthrough gives the Sunnyvale, Calif.-based company the bragging rights to a widely watched measurement for assessing the power of an Internet search engine. Yahoo said its index, boosted by a recent upgrade, covers 20.8 billion online "objects," comprised of about 19.2 billion documents and 1.6 billion images.
By comparison, Google said it tracks 11.3 billion objects. That figure consists of the nearly 8.2 billion Web pages that Google proudly touts on its home page and 2.1 billion images, with the remainder of material coming from its group discussions. Until yesterday, Yahoo hadn't publicly disclosed the size of its search index, but industry estimates had placed the figure somewhere between 6 billion and 8 billion. "This is a great reason for more people to check us out," said Eckart Walther, Yahoo's vice president of products. "We are more comprehensive than anyone else out there." In a statement late yesterday, Google spokesman Nate Tyler questioned whether the size of Yahoo's search index had really surpassed its own. "We welcome innovation in search, but as of this afternoon we have not been able to verify a substantial increase to Yahoo's Web index via their search results," Tyler said. Verifying the index claims of the search engines is virtually impossible because there is no official auditing system, said Danny Sullivan, editor of industry newsletter Search Engine Watch.
Nevertheless, supplanting Mountain View, Calif.-based Google as the biggest search engine should give Yahoo a potent marketing weapon in a tense duel for industry leadership, predicted Forrester Research analyst Charlene Li. "The Google brand stands for search and [Yahoo's] strategy has been to undercut that brand," she said. Yahoo has had its sights set on Google since early last year when it introduced its own search technology and index to end a business partnership between the two companies. For the previous 3½ years, Yahoo had been licensing its search results through Google -- an arrangement that helped turn its rival into one of the Internet's biggest success stories. Since the split, Google has maintained a comfortable lead over Yahoo, even as its challenger continued to roll out new features that impressed industry analysts. Through June, Google held a 36.9 percent share of the U.S. search engine market with Yahoo at 30.4 percent, according to comScore Networks. Generating searches is crucial for both companies because the requests spur revenue-producing ads alongside the results. The strategy has proven highly effective for both companies, with Google earning $712 million through the first half of the year and Yahoo earning $959 million during the same time.
While index size is an important factor in the search engine equation, other components, including the relevancy of the results and the freshness of the index, are even more significant, both Li and Sullivan said. "You could add a billion pages about Britney Spears and that doesn't mean the quality of results will be any better," Sullivan said. "There have been times when other search indexes have expanded, and the results have actually gotten worse."
Brought to you by Guardian eCommerce.
Yahoo's expansion doesn't necessarily mean it produces more useful results than Google, which has long been considered the Internet's most comprehensive database. But the breakthrough gives the Sunnyvale, Calif.-based company the bragging rights to a widely watched measurement for assessing the power of an Internet search engine. Yahoo said its index, boosted by a recent upgrade, covers 20.8 billion online "objects," comprised of about 19.2 billion documents and 1.6 billion images.
By comparison, Google said it tracks 11.3 billion objects. That figure consists of the nearly 8.2 billion Web pages that Google proudly touts on its home page and 2.1 billion images, with the remainder of material coming from its group discussions. Until yesterday, Yahoo hadn't publicly disclosed the size of its search index, but industry estimates had placed the figure somewhere between 6 billion and 8 billion. "This is a great reason for more people to check us out," said Eckart Walther, Yahoo's vice president of products. "We are more comprehensive than anyone else out there." In a statement late yesterday, Google spokesman Nate Tyler questioned whether the size of Yahoo's search index had really surpassed its own. "We welcome innovation in search, but as of this afternoon we have not been able to verify a substantial increase to Yahoo's Web index via their search results," Tyler said. Verifying the index claims of the search engines is virtually impossible because there is no official auditing system, said Danny Sullivan, editor of industry newsletter Search Engine Watch.
Nevertheless, supplanting Mountain View, Calif.-based Google as the biggest search engine should give Yahoo a potent marketing weapon in a tense duel for industry leadership, predicted Forrester Research analyst Charlene Li. "The Google brand stands for search and [Yahoo's] strategy has been to undercut that brand," she said. Yahoo has had its sights set on Google since early last year when it introduced its own search technology and index to end a business partnership between the two companies. For the previous 3½ years, Yahoo had been licensing its search results through Google -- an arrangement that helped turn its rival into one of the Internet's biggest success stories. Since the split, Google has maintained a comfortable lead over Yahoo, even as its challenger continued to roll out new features that impressed industry analysts. Through June, Google held a 36.9 percent share of the U.S. search engine market with Yahoo at 30.4 percent, according to comScore Networks. Generating searches is crucial for both companies because the requests spur revenue-producing ads alongside the results. The strategy has proven highly effective for both companies, with Google earning $712 million through the first half of the year and Yahoo earning $959 million during the same time.
While index size is an important factor in the search engine equation, other components, including the relevancy of the results and the freshness of the index, are even more significant, both Li and Sullivan said. "You could add a billion pages about Britney Spears and that doesn't mean the quality of results will be any better," Sullivan said. "There have been times when other search indexes have expanded, and the results have actually gotten worse."
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Tuesday, August 16, 2005
Online Ad Revenue to Double to $18.9 Billion by 2010
Another sign that e-commerce has come of age appeared yesterday as JupiterResearch predicted online advertising would reach US$18.9 billion by 2010 -- almost double last year's gross of $9.6 billion. Much of that revenue growth will be stoked by search engine advertising, which garnered 40 percent of online ad sales in 2004, compared to 27 percent for display and sponsorship advertising and 18 percent for classified advertising, according to another report, the Interactive Advertising Bureau's (IAB) 2004 annual report on Internet advertising. "There is phenomenal momentum behind search engine advertising," JupiterResearch senior analyst Gary Stein observed in a statement. "The number of advertisers using search to market products continues to grow, as does the overall efficiency of the market -- search engines are getting better at making money off search engine results pages."
Charlene Li, an analyst with Forrester Research, which is based in Boston, added, "The reason that it's growing [search advertising]quickly is that people can see money going in and quickly coming out. They spend money on marketing and they actually see sales on the back-end at the cash register." "With display advertising, it's a bit more loose," she said. "Oftentimes, the reason you do it is for brand awareness, not necessarily for direct response." Part of the allure of search engine advertising is its ability to target the intent of consumers, she explained. "You know someone's intent much more clearly if they're using search because they have put in the search terms for what they're actually looking for," she said. "Because of that, I can target the person with the ad very specifically." "If I'm on a Web page, you don't know what my intent is, for the most part, especially if I come on to the home page of something like Yahoo," she said.
Pete Petrusky, advisory services director for PricewaterhouseCoopers, which wrote the IAB report on 2004 Internet advertising revenues, maintained that online marketing is entering a second phase. "What's driving it is an improved infrastructure where advertisers have a much better opportunity to present and deliver more compelling advertising on this medium than they did five years ago when most users were held hostage to dial-up speeds," he said. "Now you've got broadband that's not only expected to grow but get faster over the next 18 months," he continued. "That provides brand advertisers a very large audience to target." "The medium is in a much better position today to satisfy brand advertisers, which have larger pockets than direct-marketing, performance-based advertisers," he said.
IAB President Greg Stuart compared the state of online advertising today to the nascent cable television market in the 1970s and 1980s. At that time, CATV operators targeted direct marketers -- the ones predominantly buying search ads now -- as advertisers. "Direct marketers were the first ones to use cable because they don't care where their message occurs; they only care about performance," he said. "Over time," he continued, "the brand advertisers began to look at their direct-marketing brothers and they said, 'Hey, this stuff is working for the direct marketers; it will probably work for me in branding.' That's when you began to see a real escalation in cable advertising."
In its report, released at the Search Engine Strategies Conference & Expo held this week in New York City, JupiterResearch noted that other advertising areas will also grow during the next five years. Classified advertising, for example, will grow 10 percent, reaching $4.1 billion in 2010, the report predicted. Rich media spending will achieve a 25 percent annual compound growth to reach $3.5 billion in 2010, it said, and streaming media will blossom even faster -- a 30 percent annual compound growth rate during the same time frame, to $943 million. The IAB's Stuart, though, had a word of caution about Internet predictions. "From some of the numbers that we've seen in the past, the analyst firms have been horribly wrong," he declared. "There's still too much new development, too much innovation going on to draw a line in the sand about what really is going to happen."
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Charlene Li, an analyst with Forrester Research, which is based in Boston, added, "The reason that it's growing [search advertising]quickly is that people can see money going in and quickly coming out. They spend money on marketing and they actually see sales on the back-end at the cash register." "With display advertising, it's a bit more loose," she said. "Oftentimes, the reason you do it is for brand awareness, not necessarily for direct response." Part of the allure of search engine advertising is its ability to target the intent of consumers, she explained. "You know someone's intent much more clearly if they're using search because they have put in the search terms for what they're actually looking for," she said. "Because of that, I can target the person with the ad very specifically." "If I'm on a Web page, you don't know what my intent is, for the most part, especially if I come on to the home page of something like Yahoo," she said.
Pete Petrusky, advisory services director for PricewaterhouseCoopers, which wrote the IAB report on 2004 Internet advertising revenues, maintained that online marketing is entering a second phase. "What's driving it is an improved infrastructure where advertisers have a much better opportunity to present and deliver more compelling advertising on this medium than they did five years ago when most users were held hostage to dial-up speeds," he said. "Now you've got broadband that's not only expected to grow but get faster over the next 18 months," he continued. "That provides brand advertisers a very large audience to target." "The medium is in a much better position today to satisfy brand advertisers, which have larger pockets than direct-marketing, performance-based advertisers," he said.
IAB President Greg Stuart compared the state of online advertising today to the nascent cable television market in the 1970s and 1980s. At that time, CATV operators targeted direct marketers -- the ones predominantly buying search ads now -- as advertisers. "Direct marketers were the first ones to use cable because they don't care where their message occurs; they only care about performance," he said. "Over time," he continued, "the brand advertisers began to look at their direct-marketing brothers and they said, 'Hey, this stuff is working for the direct marketers; it will probably work for me in branding.' That's when you began to see a real escalation in cable advertising."
In its report, released at the Search Engine Strategies Conference & Expo held this week in New York City, JupiterResearch noted that other advertising areas will also grow during the next five years. Classified advertising, for example, will grow 10 percent, reaching $4.1 billion in 2010, the report predicted. Rich media spending will achieve a 25 percent annual compound growth to reach $3.5 billion in 2010, it said, and streaming media will blossom even faster -- a 30 percent annual compound growth rate during the same time frame, to $943 million. The IAB's Stuart, though, had a word of caution about Internet predictions. "From some of the numbers that we've seen in the past, the analyst firms have been horribly wrong," he declared. "There's still too much new development, too much innovation going on to draw a line in the sand about what really is going to happen."
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Monday, August 15, 2005
Pop-Up Ad Pioneer Now Shunning Practice
A pioneer of software that tailors pop-up ads to Internet users' browsing habits is beginning to shun a practice that has invited much derision and plenty of lawsuits. A new service Claria is launching this month will still deliver advertising to the computer desktops of Web surfers ... only this time, they won't be annoying pop-ups. So-called personalization -- targeting surfers with ads based on their online outings and errands -- was always Claria's goal, says its co-founder and chief executive, Jeff McFadden.
Pop-ups delivered via adware, which is often criticized as sneaky in its installation, were merely a stepping stone as Claria waited for the technology to improve and the behavioral-targeting market to ripen, he said. "It was never a destination," McFadden told The Associated Press. "There's a lot of people who aren't fans of the pop-up model." Some might consider that an understatement from the head of a company whose name has become synonymous with adware, which many consider a cyberparasite or worse. Although Scott Eagle, Claria's director of marketing, said market forces ultimately drove the decision, he acknowledged the new strategy could help improve the image of a company that has bothered more than consumers. The New York Times Co. and L.L. Bean are among businesses that have sued Claria for delivering pop-up ads that they said subverted paid advertising or lured visitors to rivals. Claria even changed its name in 2003 from Gator, though the company insists it wasn't a response to mounting criticism.
"It is a little naive of them to believe they can introduce a product and have the sins of the past forgotten completely," said Jeff Lanctot, vice president of media at Avenue A/Razorfish, an ad-placement agency whose sister company makes behavioral-targeting technology that could compete with Claria's. "They have to be completely aboveboard and take extra steps other companies don't have to do to gain trust back," said Ari Schwartz, associate director with the Center for Democracy and Technology. Many of Claria's critics remain skeptical.
Claria's new services will still require a software download "just like the old Claria software," said Ben Edelman, a Harvard University student who specializes in spyware research. "The question is how sneaky they are going to be about it." Claria's software typically comes bundled with free products such as its own eWallet password-storage program and file-sharing software like Kazaa . Though licensing agreements disclose the ad components, many computer users don't bother reading them. And that prompts complaints that Claria isn't doing enough to obtain consent.
In the new model, Claria will work with developers of toolbars and instant-messaging programs as well as reputable Web sites -- and largely have them bear responsibility for branding and getting consumer consent.
The Interactive Advertising Bureau says pop-ups peaked at 6 percent of all online advertising two years ago and have been declining since. America Online stopped selling pop-up ads in 2002, and most Web browsers now block them. Even so, Claria claims it commanded 20 percent of the adware market with US$100 million in revenues last year, mostly from pop-ups delivered through software on some 40 million computer desktops. The 7-year-old company, which has 235-odd employees at its Redwood City, Calif., headquarters and other locations, began a pilot in May of a new ad network called BehaviorLink that serves banner ads targeted to a user's interests. With software for it installed, someone reading online news articles on maternity might get pitches for baby products.
And while Claria's pop-up ads sometimes covered up someone else's Web site, BehaviorLink ads come with the site's permission. In some cases, Claria buys ad space and resells it at a premium; in others, Claria works out a revenue-sharing arrangement. Companies like Revenue Science and Tacoda Systems also offer behavioral-targeting services, but they use browser "cookies" instead of software downloads, meaning they could potentially reach more users overall but won't have Claria's across-the-Web targeting capabilities.
The product Claria is launching this month, in a test version, is called PersonalWeb. It generates "personalized Web portals" on the fly so that a user who just checked baseball scores and movie show times might get a page pulling top items from ESPN and Moviefone. The page will also display targeted ads from BehaviorLink. An existing portal can also buy Claria's technology to incorporate personalization. Though Yahoo and others now have customization features, they rely on users to set preferences and are not automatic. BehaviorLink and PersonalWeb combined, Eagle said, will mean more time spent on each site and more value for each ad. Traditional advertising has up to 30 times the potential of adware pop-ups, he said, making Claria a possible target for acquisition. He insisted, though, that Claria was happy to remain independent, and he refused to comment on reports that Microsoft has been in talks to buy Claria. Claria still must navigate some challenging terrain on privacy and consent, and many key decisions still need to be worked out.
For example, although Claria said it would obtain permission before activating PersonalWeb, it is negotiating on a site-by-site basis whether that permission would be limited to a specific site that runs PersonalWeb or cover the entire network. Claria says its data on browsing habits are all anonymous, but it is open to letting partners link such information with personally identifiable information. Whatever happens, users will be fully informed before they accept, said Reed Freeman, Claria's chief privacy officer. Benefits to the consumer, he said, will be easier to explain than the previous trade-off between free software and more pop-ups. Larry Ponemon, one of three outside privacy consultants hired by Claria, said complaints about privacy stem more from annoyance with pop-ups rather than any data collected. Non-adware companies might capture more data but get fewer complaints, he said.
Claria still must win over the Web sites that once sued it. Eagle said most have been willing to listen, even if they have yet to sign deals. Advertisers that have shunned pop-ups, meanwhile, have been more willing to run traditional ads through Claria, Eagle said, though he declined to name any of the 250 advertisers participating in BehaviorLink's pilot. Elias Plishner, head of the interactive group at Universal McCann ad agency, said many companies that previously weren't willing to "dip their toes into behavior marketing" might now be willing to give Claria a chance.
Brought to you by Guardian eCommerce.
Pop-ups delivered via adware, which is often criticized as sneaky in its installation, were merely a stepping stone as Claria waited for the technology to improve and the behavioral-targeting market to ripen, he said. "It was never a destination," McFadden told The Associated Press. "There's a lot of people who aren't fans of the pop-up model." Some might consider that an understatement from the head of a company whose name has become synonymous with adware, which many consider a cyberparasite or worse. Although Scott Eagle, Claria's director of marketing, said market forces ultimately drove the decision, he acknowledged the new strategy could help improve the image of a company that has bothered more than consumers. The New York Times Co. and L.L. Bean are among businesses that have sued Claria for delivering pop-up ads that they said subverted paid advertising or lured visitors to rivals. Claria even changed its name in 2003 from Gator, though the company insists it wasn't a response to mounting criticism.
"It is a little naive of them to believe they can introduce a product and have the sins of the past forgotten completely," said Jeff Lanctot, vice president of media at Avenue A/Razorfish, an ad-placement agency whose sister company makes behavioral-targeting technology that could compete with Claria's. "They have to be completely aboveboard and take extra steps other companies don't have to do to gain trust back," said Ari Schwartz, associate director with the Center for Democracy and Technology. Many of Claria's critics remain skeptical.
Claria's new services will still require a software download "just like the old Claria software," said Ben Edelman, a Harvard University student who specializes in spyware research. "The question is how sneaky they are going to be about it." Claria's software typically comes bundled with free products such as its own eWallet password-storage program and file-sharing software like Kazaa . Though licensing agreements disclose the ad components, many computer users don't bother reading them. And that prompts complaints that Claria isn't doing enough to obtain consent.
In the new model, Claria will work with developers of toolbars and instant-messaging programs as well as reputable Web sites -- and largely have them bear responsibility for branding and getting consumer consent.
The Interactive Advertising Bureau says pop-ups peaked at 6 percent of all online advertising two years ago and have been declining since. America Online stopped selling pop-up ads in 2002, and most Web browsers now block them. Even so, Claria claims it commanded 20 percent of the adware market with US$100 million in revenues last year, mostly from pop-ups delivered through software on some 40 million computer desktops. The 7-year-old company, which has 235-odd employees at its Redwood City, Calif., headquarters and other locations, began a pilot in May of a new ad network called BehaviorLink that serves banner ads targeted to a user's interests. With software for it installed, someone reading online news articles on maternity might get pitches for baby products.
And while Claria's pop-up ads sometimes covered up someone else's Web site, BehaviorLink ads come with the site's permission. In some cases, Claria buys ad space and resells it at a premium; in others, Claria works out a revenue-sharing arrangement. Companies like Revenue Science and Tacoda Systems also offer behavioral-targeting services, but they use browser "cookies" instead of software downloads, meaning they could potentially reach more users overall but won't have Claria's across-the-Web targeting capabilities.
The product Claria is launching this month, in a test version, is called PersonalWeb. It generates "personalized Web portals" on the fly so that a user who just checked baseball scores and movie show times might get a page pulling top items from ESPN and Moviefone. The page will also display targeted ads from BehaviorLink. An existing portal can also buy Claria's technology to incorporate personalization. Though Yahoo and others now have customization features, they rely on users to set preferences and are not automatic. BehaviorLink and PersonalWeb combined, Eagle said, will mean more time spent on each site and more value for each ad. Traditional advertising has up to 30 times the potential of adware pop-ups, he said, making Claria a possible target for acquisition. He insisted, though, that Claria was happy to remain independent, and he refused to comment on reports that Microsoft has been in talks to buy Claria. Claria still must navigate some challenging terrain on privacy and consent, and many key decisions still need to be worked out.
For example, although Claria said it would obtain permission before activating PersonalWeb, it is negotiating on a site-by-site basis whether that permission would be limited to a specific site that runs PersonalWeb or cover the entire network. Claria says its data on browsing habits are all anonymous, but it is open to letting partners link such information with personally identifiable information. Whatever happens, users will be fully informed before they accept, said Reed Freeman, Claria's chief privacy officer. Benefits to the consumer, he said, will be easier to explain than the previous trade-off between free software and more pop-ups. Larry Ponemon, one of three outside privacy consultants hired by Claria, said complaints about privacy stem more from annoyance with pop-ups rather than any data collected. Non-adware companies might capture more data but get fewer complaints, he said.
Claria still must win over the Web sites that once sued it. Eagle said most have been willing to listen, even if they have yet to sign deals. Advertisers that have shunned pop-ups, meanwhile, have been more willing to run traditional ads through Claria, Eagle said, though he declined to name any of the 250 advertisers participating in BehaviorLink's pilot. Elias Plishner, head of the interactive group at Universal McCann ad agency, said many companies that previously weren't willing to "dip their toes into behavior marketing" might now be willing to give Claria a chance.
Brought to you by Guardian eCommerce.
Saturday, August 13, 2005
CAN-SPAM or Cannot, That Is the Question
The University of Texas didn't violate the constitutional rights of an online dating service when it blocked thousands of unsolicited e-mails, a federal appeals court panel ruled yesterday.
White Buffalo Ventures, which operates the dating site LonghornSingles.com, had appealed to the 5th U.S. Circuit Court of Appeals, saying it had complied with all anti-spam laws. Right to Send Unsolicited E-Mail The company argued that the university violated its constitutional rights by filtering out 59,000 e-mails in 2003. White Buffalo also claimed a federal act that allows certain e-mails superseded the university's anti-spam policy. The 5th Circuit panel found that the federal anti-spam law, CAN-SPAM , does not pre-empt the university's policy and that the policy is permissible under the First Amendment. The law requires messages to have a title that correctly states the contents of the e-mail, a valid address and that companies honor requests to unsubscribe. The court did not need to rule on whether the state university e-mail servers are public or private.
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White Buffalo Ventures, which operates the dating site LonghornSingles.com, had appealed to the 5th U.S. Circuit Court of Appeals, saying it had complied with all anti-spam laws. Right to Send Unsolicited E-Mail The company argued that the university violated its constitutional rights by filtering out 59,000 e-mails in 2003. White Buffalo also claimed a federal act that allows certain e-mails superseded the university's anti-spam policy. The 5th Circuit panel found that the federal anti-spam law, CAN-SPAM , does not pre-empt the university's policy and that the policy is permissible under the First Amendment. The law requires messages to have a title that correctly states the contents of the e-mail, a valid address and that companies honor requests to unsubscribe. The court did not need to rule on whether the state university e-mail servers are public or private.
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Friday, August 12, 2005
Yahoo Tests New Audio Search Feature
Yahoo today will begin testing a new search engine feature that will pore through millions of songs offered by popular Internet music services like iTunes, Rhapsody and Napster. The free service, available at audio.search.yahoo.com, boasts an index of more than 50 million audio files, including newscasts, speeches and interviews posted online, as well as the Internet's deepening pool of "podcasts" -- recordings made to be played on a computer or digital device like Apple Computer's (Nasdaq: AAPL) iPod player. The index identifies the content by reading information -- known as "metadata" -- embedded in the files.
Other Internet search engines, such as America Online's Singing Fish and Blinkx, already find audio files, but Yahoo is touting its as the most comprehensive, largely because it has received permission to index downloadable songs offered by virtually all of the Internet's top music services.
"It's really one-stop shopping for the music fan," said Bradley Horowitz, Yahoo's director of technology development, search and marketplace group. Yahoo's new alliance comes just three months after the company set out to topple the Internet's top online music services with the introduction of a rival subscription service that allows customers to download all the songs they want for US$6.99 per month. That price represents a sharp discount from similar services offered by Napster and RealNetworks' Rhapsody.
The audio search feature won't favor Yahoo's songs over the others, Horowitz said. "When it comes to search, we're like Switzerland. We can't show bias in search." Yahoo will have an incentive to drive traffic to other music services because it will get a small commission for songs downloaded by people coming from its Web site.
The expansion into audio search coincides with an increasing emphasis by Yahoo and other top search engines on indexing online video. The diversification beyond searching simple text online reflects the Web's evolution into a multimedia hub -- a shift that the top search engines hope to parlay into profits. There's another reason all the major search engines are developing more bells and whistles -- the battle to attract and retain users so they can make more money selling ads. Yahoo won't display ads next to its audio search results initially, but that could change as the service evolves, Horowitz said. Google, the Internet's search engine leader, isn't yet so musically inclined.
Brought to you by Guardian eCommerce.
Other Internet search engines, such as America Online's Singing Fish and Blinkx, already find audio files, but Yahoo is touting its as the most comprehensive, largely because it has received permission to index downloadable songs offered by virtually all of the Internet's top music services.
"It's really one-stop shopping for the music fan," said Bradley Horowitz, Yahoo's director of technology development, search and marketplace group. Yahoo's new alliance comes just three months after the company set out to topple the Internet's top online music services with the introduction of a rival subscription service that allows customers to download all the songs they want for US$6.99 per month. That price represents a sharp discount from similar services offered by Napster and RealNetworks' Rhapsody.
The audio search feature won't favor Yahoo's songs over the others, Horowitz said. "When it comes to search, we're like Switzerland. We can't show bias in search." Yahoo will have an incentive to drive traffic to other music services because it will get a small commission for songs downloaded by people coming from its Web site.
The expansion into audio search coincides with an increasing emphasis by Yahoo and other top search engines on indexing online video. The diversification beyond searching simple text online reflects the Web's evolution into a multimedia hub -- a shift that the top search engines hope to parlay into profits. There's another reason all the major search engines are developing more bells and whistles -- the battle to attract and retain users so they can make more money selling ads. Yahoo won't display ads next to its audio search results initially, but that could change as the service evolves, Horowitz said. Google, the Internet's search engine leader, isn't yet so musically inclined.
Brought to you by Guardian eCommerce.
Thursday, August 11, 2005
Online Scams Target ATMs
A new report says online thieves are increasingly getting to consumers' money in yet another way: through ATMs. An estimated 3 million U.S. consumers were victims of online "phishing" scams involving automated teller machines in the year ended in May, according to a study from technology research company Gartner .
The Web has long been a hot spot for cyber-thieves who set up fake Web sites and use fake e-mails to trick consumers into giving up credit card numbers and other personal information.
The latest twist is for the crooks to use software to monitor consumers' keystrokes as they type in bank account numbers and personal identification numbers. They use those numbers to craft counterfeit ATM cards that let them withdraw money right from consumers' bank accounts.
Gartner research director Avivah Litan estimates that ATM and debit card theft cost banks and their insurers US$2.75 billion in the 12-month period, with an average loss of more than $900.
Banking industry representatives were quick to dispute the report, saying actual bank losses are much lower and that most financial institutions have added security measures in the past year that have decreased ATM fraud dramatically. "We're a bit perplexed ... because the real numbers aren't even close" to $2.75 billion, said Nessa Feddis, senior federal counsel for the American Bankers Association. Feddis said for all of 2003, for example, the nation's biggest banks reported total fraud-related losses from checking and savings accounts of only $600 million, "and the trends show [losses from all fraud] are declining."
Gartner based its study in large part on a survey of 5,000 consumers who are active on the Internet . While credit card fraud and illegal checking account transfers were the most prevalent type of Internet thievery, according to the consumers surveyed, bank account information theft resulted in bigger monetary losses and was seen as a growing problem. Banks typically cover consumers' losses from fraud, meaning that typically it's banks, not consumers, that lose money in phishing scams.
Analyst Litan said the banks themselves were mainly to blame for the losses. That's because up until about a year ago, big banks didn't typically check all of the security ID data on the magnetic strips of ATM cards. That practice changed after the big banks experienced an increase in ATM fraud, but Litan said many smaller banks and credit unions still don't check the so-called Track 2 data on magnetic strips. "The security is all there. They just have to use it," she said. "And as soon as they [banks] find out they're getting defrauded, they do." Feddis of the bankers association acknowledged that many big banks didn't always check the extra ID information up until a year or so ago, because they didn't see the need.
"It's a bit like not locking your car doors if you live in a small town," she said. "There wasn't really a need ... because there wasn't really a lot of this type of fraud." In its report, Gartner predicted that by the end of this year, nearly 30 more financial institutions will face ATM fraud problems tied to phishing scams. But it also predicted that at least 75 percent of banks will learn their lesson and start checking the Track 2 data on magnetic cards.
Meanwhile, many banks also are taking other steps to increase online security to prevent phishing scams. Charlotte, N.C.-based Bank of America, for instance, recently rolled out a new security program called SiteKey that asks customers to verify a specific photograph or icon they chose previously before logging in. Other banks are adding different security measures. "Our members do see an increase in phishing and other scam efforts," said Fritz Elmendorf, spokesman for the Consumer Bankers Association, a trade group. "But they're also doing their best to stay ahead of it."
Brought to you by Guardian eCommerce.
The Web has long been a hot spot for cyber-thieves who set up fake Web sites and use fake e-mails to trick consumers into giving up credit card numbers and other personal information.
The latest twist is for the crooks to use software to monitor consumers' keystrokes as they type in bank account numbers and personal identification numbers. They use those numbers to craft counterfeit ATM cards that let them withdraw money right from consumers' bank accounts.
Gartner research director Avivah Litan estimates that ATM and debit card theft cost banks and their insurers US$2.75 billion in the 12-month period, with an average loss of more than $900.
Banking industry representatives were quick to dispute the report, saying actual bank losses are much lower and that most financial institutions have added security measures in the past year that have decreased ATM fraud dramatically. "We're a bit perplexed ... because the real numbers aren't even close" to $2.75 billion, said Nessa Feddis, senior federal counsel for the American Bankers Association. Feddis said for all of 2003, for example, the nation's biggest banks reported total fraud-related losses from checking and savings accounts of only $600 million, "and the trends show [losses from all fraud] are declining."
Gartner based its study in large part on a survey of 5,000 consumers who are active on the Internet . While credit card fraud and illegal checking account transfers were the most prevalent type of Internet thievery, according to the consumers surveyed, bank account information theft resulted in bigger monetary losses and was seen as a growing problem. Banks typically cover consumers' losses from fraud, meaning that typically it's banks, not consumers, that lose money in phishing scams.
Analyst Litan said the banks themselves were mainly to blame for the losses. That's because up until about a year ago, big banks didn't typically check all of the security ID data on the magnetic strips of ATM cards. That practice changed after the big banks experienced an increase in ATM fraud, but Litan said many smaller banks and credit unions still don't check the so-called Track 2 data on magnetic strips. "The security is all there. They just have to use it," she said. "And as soon as they [banks] find out they're getting defrauded, they do." Feddis of the bankers association acknowledged that many big banks didn't always check the extra ID information up until a year or so ago, because they didn't see the need.
"It's a bit like not locking your car doors if you live in a small town," she said. "There wasn't really a need ... because there wasn't really a lot of this type of fraud." In its report, Gartner predicted that by the end of this year, nearly 30 more financial institutions will face ATM fraud problems tied to phishing scams. But it also predicted that at least 75 percent of banks will learn their lesson and start checking the Track 2 data on magnetic cards.
Meanwhile, many banks also are taking other steps to increase online security to prevent phishing scams. Charlotte, N.C.-based Bank of America, for instance, recently rolled out a new security program called SiteKey that asks customers to verify a specific photograph or icon they chose previously before logging in. Other banks are adding different security measures. "Our members do see an increase in phishing and other scam efforts," said Fritz Elmendorf, spokesman for the Consumer Bankers Association, a trade group. "But they're also doing their best to stay ahead of it."
Brought to you by Guardian eCommerce.
Tuesday, August 09, 2005
Aggregator Dogpile Says Not All Search Alike
Dogpile.com, the most heavily visited meta-search engine on the Web, has said it would add Microsoft's relatively new MSN Search tool to the array of engines it uses and also said that contrary to popular belief, different search engines provide vastly different results. The addition of MSN Search means Dogpile now has access to results from four of the leading search engines, as it already was using results from Yahoo, Google, and Ask Jeeves. Rather than searching the Web directly, Dogpile sends queries to those search engines and then returns results that are an aggregation of the top results from each site. It returns results based in part on how many click-throughs certain results have received in the past.
The addition of MSN Search came as Dogpile, which is owned by InfoSpace.com, released results of a study that it commissioned, along with professors from the University of Pittsburgh and Pennsylvania State University, on search results overlapping. That study, which was conducted during July, not long after both Google and Yahoo announced updates to their indexes of Web pages, found that of the first-page results from 12,570 searches on the top four search engines, just 1.1 percent were shared by all four sites. About 11 percent of results were shared by at least two search engines, but nearly 85 percent of results were unique to one of the four engines.
The study did not look at the overall results returned, but rather just the first page. Dogpile noted that the vast majority of users never click onto a second page or results, let alone get deep into the returned pages. Overlap is minimal on both Web and sponsored results, according to the study.
The study results could have far-reaching implications for search. The researchers said that the typical Web user employs an average of nearly three search engines each month, which is another indication that users aren't easily finding what they want, despite massive improvements in search technology.
The study noted that users might turn to different search engines because one is closer at hand, rather than out of frustration over results. For instance, a user already on the Yahoo portal might simply plug a query into the ubiquitous search box rather than go to his or her favorite search site.
Room for More Advertising Forrester Research analyst Charlene Li said despite the results of the study, the difficulty in differentiating search engines is what has led to the massive war of attrition over features and related services such as Web e-mail. "Search engines know that building loyalty just on search alone is very difficult," Li said. "There are other avenues that are much more likely to keep a user coming back to a search site or portal than its search technology."
That's true even though Google built its brand by creating a more vigorous search tool, she added, with many users apparently believing that Yahoo and others have since largely caught up to Google on pure search technology. One thing the search study from Dogpile cannot measure, of course, is the true relevance or usefulness of results. In other words, though they might differ, the search results might all provide a user with satisfactory information. There are also implications for marketers, since the Dogpile study found that as many as a quarter of search results pages looked at had no sponsored results listed, meaning that potentially thousands of pages are going un-populated with advertising that could bring in important revenue to search companies. Other findings from the study included: Just 7 percent of the top ranked Web results were the same across all search engines for any given search query and in no case did all agree on the top three results.
Being included alongside the three main independent search engines on Dogpile was seen by many observers as a victory for Microsoft, especially since it arrived somewhat late at the search dance, unveiling its standalone search engine earlier this year and still working out improvements to put it on equal footing with Google and Yahoo. Meanwhile, some see the next pitched battle over search dominance as featuring Microsoft's MSN going head-to-head with Google.
In a research note published after Microsoft's analysts day, Piper Jaffray's Safa Raschtchy said that Microsoft appears to be making great strides and seems poised to roll out search improvements both on the Web and on the desktop. He cited Microsoft's work on question-and-answer style search results and its push to make desktop search more user friendly. However, Raschtchy said that Google's deep well of technical talent and search expertise could likely counter quickly any Microsoft rollout that users find appealing, setting up the prospect of a continued war over features and search technology that will in turn require Yahoo, Google and others to continue to invest heavily in capital equipment and research.
Brought to you by the Guardian eCommerce Privacy Seal Program.
The addition of MSN Search came as Dogpile, which is owned by InfoSpace.com, released results of a study that it commissioned, along with professors from the University of Pittsburgh and Pennsylvania State University, on search results overlapping. That study, which was conducted during July, not long after both Google and Yahoo announced updates to their indexes of Web pages, found that of the first-page results from 12,570 searches on the top four search engines, just 1.1 percent were shared by all four sites. About 11 percent of results were shared by at least two search engines, but nearly 85 percent of results were unique to one of the four engines.
The study did not look at the overall results returned, but rather just the first page. Dogpile noted that the vast majority of users never click onto a second page or results, let alone get deep into the returned pages. Overlap is minimal on both Web and sponsored results, according to the study.
The study results could have far-reaching implications for search. The researchers said that the typical Web user employs an average of nearly three search engines each month, which is another indication that users aren't easily finding what they want, despite massive improvements in search technology.
The study noted that users might turn to different search engines because one is closer at hand, rather than out of frustration over results. For instance, a user already on the Yahoo portal might simply plug a query into the ubiquitous search box rather than go to his or her favorite search site.
Room for More Advertising Forrester Research analyst Charlene Li said despite the results of the study, the difficulty in differentiating search engines is what has led to the massive war of attrition over features and related services such as Web e-mail. "Search engines know that building loyalty just on search alone is very difficult," Li said. "There are other avenues that are much more likely to keep a user coming back to a search site or portal than its search technology."
That's true even though Google built its brand by creating a more vigorous search tool, she added, with many users apparently believing that Yahoo and others have since largely caught up to Google on pure search technology. One thing the search study from Dogpile cannot measure, of course, is the true relevance or usefulness of results. In other words, though they might differ, the search results might all provide a user with satisfactory information. There are also implications for marketers, since the Dogpile study found that as many as a quarter of search results pages looked at had no sponsored results listed, meaning that potentially thousands of pages are going un-populated with advertising that could bring in important revenue to search companies. Other findings from the study included: Just 7 percent of the top ranked Web results were the same across all search engines for any given search query and in no case did all agree on the top three results.
Being included alongside the three main independent search engines on Dogpile was seen by many observers as a victory for Microsoft, especially since it arrived somewhat late at the search dance, unveiling its standalone search engine earlier this year and still working out improvements to put it on equal footing with Google and Yahoo. Meanwhile, some see the next pitched battle over search dominance as featuring Microsoft's MSN going head-to-head with Google.
In a research note published after Microsoft's analysts day, Piper Jaffray's Safa Raschtchy said that Microsoft appears to be making great strides and seems poised to roll out search improvements both on the Web and on the desktop. He cited Microsoft's work on question-and-answer style search results and its push to make desktop search more user friendly. However, Raschtchy said that Google's deep well of technical talent and search expertise could likely counter quickly any Microsoft rollout that users find appealing, setting up the prospect of a continued war over features and search technology that will in turn require Yahoo, Google and others to continue to invest heavily in capital equipment and research.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Monday, August 08, 2005
Pop-Up King Follows the Money to New Focus
Claria Corp. makes some US$100 million a year selling pop-up advertising on the Internet, but with the launch of its PersonalWeb product this month, it's hoping to hitch a ride on a bigger gravy train. With PersonalWeb, a permission-based vehicle for slotting customized advertising into Web pages, the company is diverting its focus away from the $500 million pop-up market and into the $12 billion to $15 billion in-line market. "That market is 25 to 30 times larger than the pop-up market, and we have a competitive advantage with our platform," Scott Eagle, senior vice president for marketing for the Redwood City, Calif., company formerly known as Gator, said.
He added: "Over time, will our emphasis shift? You betcha. Are we leaving the pop-up business today? Absolutely not." "As my professor at Wharton said, 'We'd rather have a hunk of watermelon than a whole grape,'" he said. "Right now I have both, but that watermelon is getting bigger and the value of the grape is getting smaller." The grape is also getting sour, as pop-ups become an increasing source of aggravation for Net surfers. A recent study commissioned by Hostway, a Chicago-based Web hosting company, showed pop-ups to be far and away the biggest pet peeve of consumers using the Internet.
"When Web sites and publishers began bombarding consumers with pop-up ads with no permission, often with no branding, they became hated," Eagle said. Rob O'Regan, editor in chief of CMO magazine in Framingham, Mass., noted that the "high annoyance factor" connected to pop-ups may be forcing Claria to redirect its focus. "It goes back to the broader concept of permission-based marketing," he said. "Consumers are in control now. They're the ones choosing whether or not they want to receive the messages. Anything that abrogates that trust, they're going to react negatively to, and pop-ups are the most egregious example of that kind of intrusive marketing." "I think it's on the endangered species list just because people don't want to receive messages that way," he added.
Hostway Vice President of Marketing John Lee maintained that marketers are looking for alternatives to pop-ups because their effectiveness has declined. "It's going to be a cat-and-mouse game for awhile until we settle on something that is acceptable to the Internet crowd as well as through the advertisers," he said. "Much of the content on the Internet is paid for by advertisers so they're looking for ROI," he explained, "and consumers, at the same time, are looking for a way to surf the Internet without being interrupted or annoyed. How that will be balanced is yet to be achieved."
PersonalWeb doesn't use pop-ups, he explained, but with a consumer's permission, it installs software on their machine that will build a profile of their online behavior. Based on that profile, customized advertising will be delivered to the consumer. That kind of customization can lead to real value for a consumer, Eagle contends. For example, a florist could offer significant discounts to consumers buying flowers through a PersonalWeb ad. "That's because we can precision target the offer to people who buy flowers and gifts quite often but who don't buy from that florist," he explained. "If you're not wasting your advertising, if you're precision targeting to your exact audience, you can put a better offer on the table."
If Claria wants PersonalWeb not to be tarred with the same brush as the company's pop-up efforts, it needs to keep the endeavor transparent, Hostway's Lee maintained. "It needs to be self-evident to people that they are choosing to do something," he said. "Much of the criticism that Claria has received in the past is not from serving up irrelevant ads," he added, "but that they installed software on computers in what was perceived to be an underhanded way."
Brought to you by Guardian eCommerce.
He added: "Over time, will our emphasis shift? You betcha. Are we leaving the pop-up business today? Absolutely not." "As my professor at Wharton said, 'We'd rather have a hunk of watermelon than a whole grape,'" he said. "Right now I have both, but that watermelon is getting bigger and the value of the grape is getting smaller." The grape is also getting sour, as pop-ups become an increasing source of aggravation for Net surfers. A recent study commissioned by Hostway, a Chicago-based Web hosting company, showed pop-ups to be far and away the biggest pet peeve of consumers using the Internet.
"When Web sites and publishers began bombarding consumers with pop-up ads with no permission, often with no branding, they became hated," Eagle said. Rob O'Regan, editor in chief of CMO magazine in Framingham, Mass., noted that the "high annoyance factor" connected to pop-ups may be forcing Claria to redirect its focus. "It goes back to the broader concept of permission-based marketing," he said. "Consumers are in control now. They're the ones choosing whether or not they want to receive the messages. Anything that abrogates that trust, they're going to react negatively to, and pop-ups are the most egregious example of that kind of intrusive marketing." "I think it's on the endangered species list just because people don't want to receive messages that way," he added.
Hostway Vice President of Marketing John Lee maintained that marketers are looking for alternatives to pop-ups because their effectiveness has declined. "It's going to be a cat-and-mouse game for awhile until we settle on something that is acceptable to the Internet crowd as well as through the advertisers," he said. "Much of the content on the Internet is paid for by advertisers so they're looking for ROI," he explained, "and consumers, at the same time, are looking for a way to surf the Internet without being interrupted or annoyed. How that will be balanced is yet to be achieved."
PersonalWeb doesn't use pop-ups, he explained, but with a consumer's permission, it installs software on their machine that will build a profile of their online behavior. Based on that profile, customized advertising will be delivered to the consumer. That kind of customization can lead to real value for a consumer, Eagle contends. For example, a florist could offer significant discounts to consumers buying flowers through a PersonalWeb ad. "That's because we can precision target the offer to people who buy flowers and gifts quite often but who don't buy from that florist," he explained. "If you're not wasting your advertising, if you're precision targeting to your exact audience, you can put a better offer on the table."
If Claria wants PersonalWeb not to be tarred with the same brush as the company's pop-up efforts, it needs to keep the endeavor transparent, Hostway's Lee maintained. "It needs to be self-evident to people that they are choosing to do something," he said. "Much of the criticism that Claria has received in the past is not from serving up irrelevant ads," he added, "but that they installed software on computers in what was perceived to be an underhanded way."
Brought to you by Guardian eCommerce.
Saturday, August 06, 2005
Study on Teen Web Use Reveals E-Commerce Challenges
A new study reveals that today's teenagers are more wired and Web-savvy than ever but also indicates that they are embracing non-traditional means to use the Internet -- bypassing e-mail in favor of instant messaging, for instance -- a trend that experts say will force the e-commerce industry to be more creative in order to reach that audience. The Pew Internet and American Life Project said the number of 12- to 17-year-olds online grew 24 percent in the past four years and now stands at just under 90 percent of them online, with more than half going on the Web at least once a day. Forty-five percent of teens have used cell phones, and a third have sent text messages. Young people are also going online more often and using more Internet services than in the past. While the Pew survey found that more teens are shopping, reading news and getting health information online, it also revealed a much wider variety in terms of how they get online, with traditional PC-based Web access and services that thrive on that platform, including e-mail, being set aside for newer technologies.
"Increasing numbers of teenagers live in a world of nearly ubiquitous computing and communication technologies that they can access at will," said Amanda Lenhart, senior research specialist at the project, who co-wrote the report. "More and more teens go online frequently and from a wider array of places. They take ever-greater advantage of this new technology ecology by mastering features like instant messaging and phone-text messaging on their tethered and mobile computing devices." The report carries a double-edged message for the Internet and e-commerce industries. Because teens are more Web-savvy than ever, they are poised to become an ideal audience for marketing to and selling to online. However, the survey also suggests they will be a less cohesive audience than today's Web users, using more devices and channels to go online, forcing retailers and marketers to create new strategies to reach them with their messages and offers.
For instance, the survey found that teens vastly prefer instant messaging and text messaging to e-mail communications, indicating that the e-mail marketing industry will have to evolve in order to keep pace. Teens who took part in Pew focus groups said they see e-mail as a way of communicating with adults, such as teachers or parents, rather than as a personalized means to chat with friends.
Teens favor both the immediacy of instant messaging and the opportunities it offers for personal expression, with the use of icons and customized IM screens. The report shows teens as seeking to always be connected, moving from computers at home to those at friends' and relatives' homes to those in public locations such as libraries and schools. That might be a strong indication that strong mobile Internet services will resonate with young people. Forrester Research analyst Charlene Li said the Web and e-commerce industries are already busy laying the foundation for the changing technology environment. One problem, however, is that it's not clear how the Internet will be accessed in the future. "Some people believe smartphones will win the day, others aren't sure that's a medium that people will feel comfortable buying and shopping with," Li said. "The major Internet brands are busy trying to make sure they're the place people will turn regardless of how they're getting onto the Web."
In fact, recent days have seen AOL launch a new mobile-friendly search service and Yahoo get its applications pre-loaded onto Motorola phones.
Brought to you by Guardian eCommerce.
"Increasing numbers of teenagers live in a world of nearly ubiquitous computing and communication technologies that they can access at will," said Amanda Lenhart, senior research specialist at the project, who co-wrote the report. "More and more teens go online frequently and from a wider array of places. They take ever-greater advantage of this new technology ecology by mastering features like instant messaging and phone-text messaging on their tethered and mobile computing devices." The report carries a double-edged message for the Internet and e-commerce industries. Because teens are more Web-savvy than ever, they are poised to become an ideal audience for marketing to and selling to online. However, the survey also suggests they will be a less cohesive audience than today's Web users, using more devices and channels to go online, forcing retailers and marketers to create new strategies to reach them with their messages and offers.
For instance, the survey found that teens vastly prefer instant messaging and text messaging to e-mail communications, indicating that the e-mail marketing industry will have to evolve in order to keep pace. Teens who took part in Pew focus groups said they see e-mail as a way of communicating with adults, such as teachers or parents, rather than as a personalized means to chat with friends.
Teens favor both the immediacy of instant messaging and the opportunities it offers for personal expression, with the use of icons and customized IM screens. The report shows teens as seeking to always be connected, moving from computers at home to those at friends' and relatives' homes to those in public locations such as libraries and schools. That might be a strong indication that strong mobile Internet services will resonate with young people. Forrester Research analyst Charlene Li said the Web and e-commerce industries are already busy laying the foundation for the changing technology environment. One problem, however, is that it's not clear how the Internet will be accessed in the future. "Some people believe smartphones will win the day, others aren't sure that's a medium that people will feel comfortable buying and shopping with," Li said. "The major Internet brands are busy trying to make sure they're the place people will turn regardless of how they're getting onto the Web."
In fact, recent days have seen AOL launch a new mobile-friendly search service and Yahoo get its applications pre-loaded onto Motorola phones.
Brought to you by Guardian eCommerce.
Friday, August 05, 2005
Google, Amazon Sued by Adult Entertainment Company
Perfect 10, an online- and print-based adult-entertainment company, is testing the limits of copyright-infringement liability in a series of lawsuits against Internet search engines Google and Amazon's A9 that are in preliminary stages. Norm Zada, the founder and chief executive officer of Perfect 10, in Beverly Hills, Calif., said Google and Amazon rely on the unauthorized display of copyrighted material under the guise of providing a search function as part of their business model. "I claim that what they've done is to display misappropriated intellectual property," Zada told United Press International. "They are displaying at least 3,000 of our best pictures for free."
Zada -- a former professor at Stanford University and other schools and a former researcher at IBM argues that Google makes money when consumers search for pictures of Perfect 10 models and then click on displayed thumbnails or Web-site links to pages that use Google's AdSense advertising program. "Google is not a search engine anymore," Zada said. "They are a commercial enterprise. They are listing pages first that are advertising with Google." Perfect 10's court filing states that the greater the content available through search engines, the more viewers they attract and the more advertising revenues they earn. The document claims that Google should be held responsible for direct, contributory and vicarious copyright infringement.
Jason Schultz, a staff attorney with the Electronic Frontier Foundation in San Francisco, a member-supported digital civil-liberties organization, said the case suggests a wider struggle over copyright-infringement liability on the Internet, but thinks it will be dismissed in response to an early motion by Google.
He noted that Russell Frackman, counsel to the record labels in the MGM vs. Grokster suit, also is representing Perfect 10. "Frackman believes that everyone should be held responsible for policing content infringement on the Internet, or whoever has the deepest pockets should," Schultz told UPI. "The copyright maximalists hate intermediaries -- search engines, ISPs and anyone else with whom they don't have a direct licensing agreement." Zada said he regards Google as the largest direct infringer of his company's material. "Why should we go after people in Hungary or Russia [who] don't even register domains under real names?" he asked. "Google is commercially taking advantage of us at a level far greater than these little guys." To prove Google had knowledge of the infringing material, Perfect 10's filing cites 34 cease-and-desist requests sent under the Digital Millennium Copyright Act for both individual pages and Web sites where Perfect 10 claims infringing material is pervasive.
Zada said although Google may have removed links to certain infringing images, he considers the search-engine giant lax in complying with the DMCA . "There are still 1,000 URLs that we have given them that haven't been altered at all," he said. The DMCA safe-harbor provision is designed to allow content owners to request the removal of infringing material and to limit the liability of Internet service providers if they comply. Zada said he thinks his case is stronger than the U.S. Supreme Court's recent MGM vs. Grokster ruling. "We think our case is stronger than Grokster because it didn't store infringing material on its servers -- Google does," Zada said. "We believe the lawsuit is without merit and we will defend against it vigorously," Steve Langdon, a Google spokesman, told UPI in an e-mail.
Robert Atkinson, vice president and director of the Technology and New Economy Project at the Public Policy Institute, a Washington think tank, said he disagrees the two cases are similar.
"There are fairly clear-cut cases where the business model is selling infringing content, like Grokster, which claimed it wasn't covered by the DMCA," Atkinson told UPI. "It seems to me that Google should be covered by the provisions of the DMCA." In a previous case by Perfect 10, against Cybernet Ventures, owners of the Adult Check age-verification service, a district court granted an injunction in favor of Perfect 10. The court found Cybernet profited from non-compliance with the DMCA. The case was settled out of court. Schultz said he sees a difference between the current case and the one against Cybernet Ventures. "This one is a little further out there," he said. "Cybernet Ventures failed to comply with the DMCA standards. The reason Perfect 10 won there was because Cybernet Ventures was sloppy."
Google has built its business around the law, Schultz noted. "Perfect 10 is just upset because they don't like the DMCA." Zada disagreed, saying he thinks Google cannot use the DMCA safe-harbor provision to limit its liability. "The DMCA does not protect direct infringers," said Zada. "It protects ISPs, who have no reason to believe their clients are infringing." Zada also said even if Google is not considered a direct infringer, the DMCA provision offers limited liability only if a service provider stops repeat infringers after receiving multiple cease-and-desist requests. He said Perfect 10 has sent multiple requests to Google and it has not complied. Julie Cohen, a professor at Georgetown University Law School in Washington, said the DMCA is not designed to turn service providers into content monitors. "The statute doesn't give content owners carte blanche to say, 'take down all this information,'" she told UPI. "It is very site-specific." Amazon did not respond to UPI's requests for comment.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Zada -- a former professor at Stanford University and other schools and a former researcher at IBM argues that Google makes money when consumers search for pictures of Perfect 10 models and then click on displayed thumbnails or Web-site links to pages that use Google's AdSense advertising program. "Google is not a search engine anymore," Zada said. "They are a commercial enterprise. They are listing pages first that are advertising with Google." Perfect 10's court filing states that the greater the content available through search engines, the more viewers they attract and the more advertising revenues they earn. The document claims that Google should be held responsible for direct, contributory and vicarious copyright infringement.
Jason Schultz, a staff attorney with the Electronic Frontier Foundation in San Francisco, a member-supported digital civil-liberties organization, said the case suggests a wider struggle over copyright-infringement liability on the Internet, but thinks it will be dismissed in response to an early motion by Google.
He noted that Russell Frackman, counsel to the record labels in the MGM vs. Grokster suit, also is representing Perfect 10. "Frackman believes that everyone should be held responsible for policing content infringement on the Internet, or whoever has the deepest pockets should," Schultz told UPI. "The copyright maximalists hate intermediaries -- search engines, ISPs and anyone else with whom they don't have a direct licensing agreement." Zada said he regards Google as the largest direct infringer of his company's material. "Why should we go after people in Hungary or Russia [who] don't even register domains under real names?" he asked. "Google is commercially taking advantage of us at a level far greater than these little guys." To prove Google had knowledge of the infringing material, Perfect 10's filing cites 34 cease-and-desist requests sent under the Digital Millennium Copyright Act for both individual pages and Web sites where Perfect 10 claims infringing material is pervasive.
Zada said although Google may have removed links to certain infringing images, he considers the search-engine giant lax in complying with the DMCA . "There are still 1,000 URLs that we have given them that haven't been altered at all," he said. The DMCA safe-harbor provision is designed to allow content owners to request the removal of infringing material and to limit the liability of Internet service providers if they comply. Zada said he thinks his case is stronger than the U.S. Supreme Court's recent MGM vs. Grokster ruling. "We think our case is stronger than Grokster because it didn't store infringing material on its servers -- Google does," Zada said. "We believe the lawsuit is without merit and we will defend against it vigorously," Steve Langdon, a Google spokesman, told UPI in an e-mail.
Robert Atkinson, vice president and director of the Technology and New Economy Project at the Public Policy Institute, a Washington think tank, said he disagrees the two cases are similar.
"There are fairly clear-cut cases where the business model is selling infringing content, like Grokster, which claimed it wasn't covered by the DMCA," Atkinson told UPI. "It seems to me that Google should be covered by the provisions of the DMCA." In a previous case by Perfect 10, against Cybernet Ventures, owners of the Adult Check age-verification service, a district court granted an injunction in favor of Perfect 10. The court found Cybernet profited from non-compliance with the DMCA. The case was settled out of court. Schultz said he sees a difference between the current case and the one against Cybernet Ventures. "This one is a little further out there," he said. "Cybernet Ventures failed to comply with the DMCA standards. The reason Perfect 10 won there was because Cybernet Ventures was sloppy."
Google has built its business around the law, Schultz noted. "Perfect 10 is just upset because they don't like the DMCA." Zada disagreed, saying he thinks Google cannot use the DMCA safe-harbor provision to limit its liability. "The DMCA does not protect direct infringers," said Zada. "It protects ISPs, who have no reason to believe their clients are infringing." Zada also said even if Google is not considered a direct infringer, the DMCA provision offers limited liability only if a service provider stops repeat infringers after receiving multiple cease-and-desist requests. He said Perfect 10 has sent multiple requests to Google and it has not complied. Julie Cohen, a professor at Georgetown University Law School in Washington, said the DMCA is not designed to turn service providers into content monitors. "The statute doesn't give content owners carte blanche to say, 'take down all this information,'" she told UPI. "It is very site-specific." Amazon did not respond to UPI's requests for comment.
Brought to you by the Guardian eCommerce Privacy Seal Program.
